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‘BOMBSHELL’: GOVT APPROVES MASSIVE HIKE OF UPTO RS7.5 PER UNIT IN BASE POWER TARIFF Sunday, 23 July, 2023 I 4 Muharram, 1445
INCREASE LIKELY TO COME INTO EFFECT FROM JULY 1
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ISLAMABAD
GOVT SAYS TARIFF HIKE WILL ONLY IMPACT 45% OF CONSUMERS
STAFF REPORT
HE federal cabinet on Saturday gave approval to a massive increase in the base tariff of electricity by up to Rs7.50 per unit against the national average tariff determination of Rs4.96 by the power regulator. The approval was given by the cabinet via circulation summary, sources told Geo News and a request has been submitted to the National Electric Power Regulatory Authority (Nepra). Federal Secretary Energy Rashid Mahmood Langrial said that 55% of electricity consumers would not be affected by the increase. Last week, the regulator hiked the tariff to increase revenue collection for the loss-making power distribution companies (Discos) during the current fiscal year. The hike is set to come into force from July 1 after formal notification by the Nepra following a public hearing. The federal government sought approval from the cabinet, adjusting different rates of increases for various consumer categories through cross-subsidy, though without affecting the overall revenue requirement. According to a Nepra statement, the revised national average tariff for the 2023-24 fiscal year has been determined at Rs29.78 per unit kWh, which is Rs.4.96 per unit higher than the previously determined national average tariff of Rs24.82. While the regulator cited the rupee’s devaluation, high inflation and interest rates, the addition of new capacities and overall low sales growth as reasons behind the increase, it was actually hiked to meet one of the conditions set by the In-
ternational Monetary Fund (IMF) of introducing structural reforms in the energy sector.
Rs 15.00 | Vol XIV No 23 I 8 Pages I Islamabad Edition
However, the applicable tariff would be much higher after including surcharges, taxes, duties and levies, besides
monthly and quarterly adjustments. According to the letter, the retrospective price hike will take effect from July 1 and includes K-Electric among the power distribution companies (Discos). It said lifeline consumers using up to 100kW per month and the protected segment consuming up to 200kW will be exempted from the hike. Hence, lifeline consumers using up to 50kW will continue paying Rs3.95 per unit while those using between 51-100kW will continue paying Rs7.74 per unit. Similarly, the base tariff for protected consumers using between 1-100kW every month will remain at Rs7.74 per unit while for protected users consuming between 101-200kW, the rate will remain at Rs10.06 per unit.
Massive power price hike to further augment public woes: PTI
ISLAMABAD: Pakistan Tehreek-i-Insaf (PTI) Focal Person on Economic Affairs Muzamil Aslam Saturday blasted the “imported government” for exorbitant increase in the power tariff, saying that it would further augment the misery of the people. Muzamil said on Saturday that the imported government increased the power rate by 30%; however, the public bill would probably be increased by 35 to 40 percent. He said that the cabal of crooks was taking decisions as if they still had 2.5 year in the power but in reality the government would have to go in next 2.5 weeks, but it released a whooping Rs. 61 billion for MPs’ development schemes. Muzamil stated that ironically, consumers who consumed less electricity were even not spared as they would also bear the brunt of the power hike. He said that the prices of the goods would witness rise considerably with the increase in electricity bill, adding that cement, fertilizer, even store-bought ice-cream would become
CII unveils comprehensive ‘code of conduct’ for peace, harmony in Muharram ISLAMABAD
STAFF REPORT
The Council of Islamic Ideology (CII) on Saturday took a momentous step towards strengthening the values and principles that form the bedrock of Pakistan’s identity by unveiling a comprehensive “code of conduct”. Addressing the press conference after a consultative meeting with prominent religious scholars and leaders, Chairman Dr Qibla Ayaz said the code, aimed at maintaining peace and tranquillity, particularly during the month of Muharramul Haram across the country, emphasised the importance of upholding the Constitution, respecting the dignity of fundamental rights, and remaining loyal to the state under all circumstances. He said the newly-introduced code placed the duty on every citizen to acknowledge and abide by the constitutional authority of the state, demonstrating unwavering allegiance to it and its institutions. He said that the key aspects of the code revolved around upholding the dignity and respect of fundamental rights as outlined in the Constitution. This included the principles of equality, social and political rights, freedom of expression, belief, worship, and assembly, he added. Dr Qibla said that the Islamic foundation of Pakistan’s Constitution and laws would be preserved, with citizens being entitled to pursue peaceful efforts for the implementation of Shariah, adding that to maintain the spirit of Shariah, the code strictly forbade any use of force in the name of Islam, armed actions against the state, violence, and incitement. Additionally, he said no individual had the right to declare anyone, including government officials, military personnel, or security agencies, as infidels. He urged the scholars and individuals from all walks of life to extend their support to the state and its institutions, particularly those responsible for law enforcement and security, to eradicate violence from society.
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more expensive due to increase in electricity prices. PTI leader stated that a consumer using 100 units was paying Rs. 7.74 per unit 14 months ago, which has now become Rs. 16.48. Muzamil went on to say that a consumer of 200 units of electricity was paying Rs 10.6 per unit a year ago, who would now pay Rs 22.95, adding that a consumer of 300 units was paying Rs 12.15 per unit a year ago but now the price went up to Rs 27.14 per unit. Moreover, he stated that Rs. 19.55 was being paid for 400 units a year ago, but now it became Rs. 32.3, adding that a power customer who used to pay Rs 19.55 for using 500 units would now pay Rs 35.24. Muzamil Aslam said that the consumption price of 600 units increased from Rs. 19.55 to Rs. 36.68 and 700 and above units of electricity went up to Rs 42.72 per unit from Rs 22.65.
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Six die in rain-related incidents across country ISLAMABAD
STAFF REPORT
At least six people died in rain-related incidents while many injured as intermittent spell of heavy monsoon rains rain wreaked havoc in parts of country. While four people died in Khyber Pakhtunkhwa (KP), two youth died in Lahore. In Lahore, the whopping 203mm of rainfall, brought the life to a standstill. According to rescue 1122 sources, two teenage boys aged 14 years and 11 years drowned in the rainwater in the city’s Sherakot Babu Sabu and Nawan kot areas, respectively. Another person got injured in roof collapse incident in Raiwand area, they added. Low lying areas of the provincial capital inundated by torrential rains with the highest rainfall recorded in airport area, Water and Sanitation Agency (WASA) said in a statement. It said 205mm rain was recorded in the airport area, 204 mm in Gulshan Ravi, 193mm in the Tajpura SDO Office area, and 190mm in Nishtar Town. Torrential showers lashed the city for 6 hours 45 minutes with rainwater entering Jinnah Hospital and General Hospital as well. In a tweet in evening, Punjab interim Chief Minister Mohsin Naqvi said Lahore received a whopping 203mm of rainfall in only five hours. He appreciated WASA and the district administration for “their remarkable efforts in clearing 95% of the water ponding in the city. Keep up the great work!”. Meanwhile, the heavy rainfall also caused the outer wall of Noor Jahan tomb to collapse. According to the spokesperson, the Walled City Authority took charge of the tomb from the department of archeology a month ago. The spokesman said that the northern outer wall and some other parts of the tomb are in dilapidated condition and work will start soon to preserve the damaged parts of the historic site. Day in the provincial capital broke with a cloudburst across the city which inundated the roads and
low-lying areas, bringing life to a flooding halt. The citizens waded through the streets and roads flooded with rainwater across the provincial capital. As the rain battered the city, at least 70 feeders of the Lahore Electric Supply Company (LESCO) tripped, suspending the power supply to several areas. LESCO spokesperson said that the work for restoring the power supply will be started soon. The interim CM visited different areas of Lahore to inspect the situation after the downpour. He directed the city administration and WASA to drain the rainwater from the roads quickly while employing all the resources available. Naqvi also ordered the authorities to increase the number of dewatering pumps installed in the city and stay in the field to address the problems faced by citizens. Moreover, he also ordered all-out efforts to keep the traffic flowing without disruption. On Friday, the Met Office said that monsoon currents are continuously penetrating the country from the Bay of Bengal. A westerly trough is also affecting the upper parts of the country that may persist during the next few days. It also warned of urban flooding in the low-lying areas of Lahore and other upper parts of the country. FOUR DIE IN KP RAINFALL: Four people were killed and one person got injured due to heavy rains in Khyber Pakhtunkhwa, a report of Provincial Disaster Management Authority (PDMA) said on Saturday. 12 houses were partially damaged due to floods and rains across the province, the authority reported. Nine houses partially damaged due to the natural disaster in Lower Chitral, it added. The KP Relief Department, District Administration, PDMA, Rescue 1122, Civil Defense, and related institutions were on alert, a spokesperson Relief Department said when contacted. A detailed assessment of the damage would be compiled as soon as the flood waters recede in Lower Chitral, he said, adding affected people in Lower Chitral had already been shifted to safer places, he added.
PM urges masses to compare PML-N, PTI govts performance in upcoming elections SHARQPUR
STAFF REPORT
Prime Minister Muhammad Shehbaz Sharif on Saturday urged the people to consider the facts involving pathetic and poor performance of corruption tainted government of Pakistan Teheek-iInsaf (PTI) with that of Pakistan Muslim League-N (PML-N) which he claimed had always been the pioneer of mega development projects. The prime minister was addressing a ceremony after foundation stone-laying of different significant development projects which included 19Kms long Lahore bypass linking Kala Shah Kaku with LahoreKarachi Motorway at a cost of Rs35 billion. The project will create about 27,000 jobs opportunities. He said they would accept public mandate in the upcoming general elections and if the PML-N under the leadership of Nawaz Sharif got another opportunity to serve the country, they would restore the real image of Pakistan. The prime minister also broke ground for expansion of Lahore-Karachi Motorway Saggian road and main Ravi bridge which would ease vehicular traffic, help save fuel and create jobs opportunities. Later, he also laid foundation stones of Esaan (Sharqpur) interchange at Abdul Hakeem Motorway and the establishment of Quaid Azam University campus and soft launch of construction of a scout college. Declaring former prime minister Muhammad Nawaz Sharif as ‘a builder of Pakistan, man behind ending loadshedding, launching of multi dollars China Pakistan Economic Corridor (CPEC) projects and a builder of a vast network of roads and putting the country on path of rapid progress, he said Nawaz Sharif aspired to transform the country into ‘an Asian tiger’. Unfortunately, his rule was ended in 2018 through a huge conspiracy hatched against Pakistan, the prime minister regretted. If the PML-N was in the government during the four years of PTI’s rule, the country would have a different destiny, he added. During the years 2013 to 2018, under Nawaz Sharif’s rule the country was making progress by leaps and bounds, but afterwards in the PTI’s government, the country was pushed into chaos. The prime minister said with a change in the regime, all the opposition leadership was sent to jails on basis of fake cases, false allegations of thefts and corruption were levelled, even sisters and daughters were sent behind bars during the PTI’s rule. “The development pace spurred by PML-N government was halted,” he regretted. The prime minister also questioned Imran Niazi’s claims of returning back 300 billion dollars stashed outside Pakistan within ninety days and said the PTI’s government did not get any single penny during the four years of its rule. Referring to Rs50 billion amount recovery scandal, he said, the UK National Crime Agency (NCA) had investigated the issue and after out of court settlement with the other party, decided to return the amount to the government exchequer but it did not go to State Bank of Pakistan rather went to the Supreme Court where Niazi’s government became a party. A closed envelop was presented before the cabinet in this regard without showing or discussing it with the members and approval was accorded, he added. “It was a huge crime as to how the national exchequer was plundered,” he said, adding the BRT Peshawar, Toshakhana, Malam Jabba, sugar scams etc were the other major corruption cases of PTI. The prime minister said the UK crime agency had also carried out investigation against him for two years over false allegations and at the request of PTI’s government but later, gave him clean chit. Citing difficulties regarding the IMF’s agreement, the prime minister said China, Kingdom of Saudi Arabia and the United Arab Emirates stood with Pakistan like rocks.
What IHC’s judgement on Super Tax means and what will happen next? CONTINUED ON PAGE 03
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SECTION 4C OF ITO 2001 TO BE READ IN ACCORDANCE WITH JUDGEMENT - UNTIL OTHERWISE ANALYSIS PROFIT DANIYAL AHMAD
On the 19th of July, the Islamabad High Court (IHC) proclaimed the imposition of super tax under section 4C of the Income Tax Ordinance 2001 (ITO) as ultra vires — exceeding the scope of authority or power granted by law, contract, or agreement. The IHC demanded it to be read down — the court adjudicated that a specific law is no longer valid as it has been demonstrated to infringe upon one or more charter rights. What does this mean? “All notices demanding the recovery of super tax for the tax year 2022 have been rescinded. However, the Federal Board of Revenue (FBR)
retains the prerogative to initiate new or fresh proceedings, provided they are in compliance with the judgement of the honourable IHC.” Asad Ladha, a partner at Raja Mohammad Akram & Co and one of the petitioners, elucidates, “The IHC articulated that they are not nullifying it, nor are they abrogating it entirely.” He adds, “They are saying that it should be interpreted in the way that they are stating.” So, has the IHC interpreted it? Concurrence with other courts In concurrence with the Lahore High Court (LHC) and Sindh High Court (SHC), the Islamabad High Court (IHC) proclaimed that 10 specific industries could not be exclusively subjected to the elevated 10% tax. Instead, these industries are to be subjected to the tax slabs established as part of the
super tax, and will be levied the conventional rates stated therein, contingent upon their tax liability. Moreover, in agreement with the SHC, the IHC declared that the super tax could not be imposed retrospectively; rather, it would be levied on tax year 2023 — not tax year 2022, as originally stated. However, the IHC has surpassed the verdicts rendered by the LHC and SHC, citing three additional infractions by the super tax. IHC’s own twist The IHC has proclaimed that the super tax could not be applied in three additional instances: where companies have paid their final tax; where the industry is exempt from taxation; and where freezing clauses in the petroleum exploration sector are applicable. The IHC has stated that the lower super tax brackets can be levied on companies (up to 4%) once these infractions are rectified,
provided that the companies meet all other criteria stipulated in the tax. Looking at the IHC’s twist Let’s start with the final tax stipulation. “Final tax is predicated on the notion that you remit a specific amount — for example, Rs 10 — and then you do not inquire about the amount or the rationale behind having Rs 10 deducted from you. It falls under a distinct category of tax, referred to as ‘full and final’,” explains Adnan Haider Randhawa, managing partner at AHR & Co and another petitioner. Expanding on this concept, Randhawa continues, “Final tax falls under a separate category in which the FBR cannot demand any account or conduct an audit. The court questioned the FBR that if they have collected the full and final tax from someone, how could they impose an additional tax on them?”
In response to this inquiry, the court has stated that the FBR could levy the tax in instances of normal or minimum tax, but they cannot do so with final tax. “This constitutes a breach of promise that is still present in other provisions of the ITO today,” Randhawa concludes. Moving on to the topic of exempted industries, Randhawa explains, “There are certain industries that have been exempted by law from tax and are still exempt today. They cannot have their exemptions revoked by 4C because those provisions have not been repealed.” To further clarify this point, Randhawa adds, “If they had been revoked, the matter would have been settled. They have not been revoked; they are still present in the statute. These industries are being told that they are not subject to normal tax, but they are subject to 4C.”
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