PESHAWAR, July 12: Consumers, both domestic and commercial, will have to pay 10 per cent tax if their monthly electricity bill exceeds Rs20,000, following the upward revision of tax rates in the federal budget.

The new policy circulated by the Federal Board of Revenue last week would prove a stumbling block for industrial growth in days to come, said Mohammad Asif, president of the Sarhad Chamber of Commerce and Industry, here on Saturday.

A circular issued by the FBR on July 5 explained the amendment made to the Finance Act by the federal government and said the tax rate payable on electricity bills exceeding Rs20,000 had been revised.

Previously, the tax on power bill was determined at a flat rate ranging from Rs60 to Rs2,000 a month for all consumers. Under the new policy, consumers, however, could get refund against the tax following filing their annual returns.

Mr Asif argued that the new policy would affect industrial growth and would reduce productivity. He said although the business community could get refund against the tax on electricity, it would cause severe liquidity problem.

“If an industrialist pays Rs5 million as tax, which he can take back after one year as refund, it will affect his working capital,” explained Mr Asif, adding that claiming refund itself was an uphill task.

He complained that industrialists and exporters usually had to wait long for taking their tax refunds because of red-tapism and lengthy procedures, saying it would increase their hardships.

Mr Asif said industrialists would have to run from pillar to post to get their tax refund and this would affect industrial efficiency. He said the national economy was already under pressure because trade deficit had reached $20 billion and the new policy would further aggravate the situation.

He asked the federal government to immediately withdraw its decision of levelling 10 per cent tax on electricity bills exceeding Rs20,000 a month.