Islamabad( The COW News Digital)In a major relief to power consumers across Pakistan, the federal government has announced the abolition of provincial electricity duty collection through electricity bills starting July 2025.
Federal Minister for Power Owais Leghari formally informed all provincial chief ministers through a written letter regarding the government’s decision. The move is aimed at reducing the overall tax burden on electricity consumers and simplifying the structure of monthly power bills.
According to the minister, the government wants to eliminate unnecessary charges that create confusion and inflate power bills. “Our objective is to ensure that electricity bills reflect only the actual cost of electricity consumption, without additional duties or hidden charges,” Leghari stated.
The announcement was accompanied by a formal communiqué highlighting recent steps taken by the federal government to lower electricity rates. These include renegotiation of agreements with Independent Power Producers (IPPs) and a reduction in return on equity for public-sector power plants.
The letter emphasized that multiple line items in electricity bills, including various taxes and duties, often lead to consumer frustration and mistrust. By removing the electricity duty, the federal government hopes to restore confidence and improve transparency in the power sector.
Leghari also called upon the provinces to explore alternative mechanisms for collecting provincial revenue rather than relying on utility bills. “Provinces should devise independent methods for duty collection. Electricity bills should not serve as a tool for levying unrelated provincial taxes,” the minister added.
The government has reiterated that the primary focus is now on allowing electricity users to pay only for what they consume, and not additional layers of charges that have long burdened household and commercial users alike.
While the move has been largely welcomed by consumer rights groups and the general public, it has also sparked discussions among provincial governments regarding their revenue streams. Analysts believe that this decision might prompt provinces to revisit their fiscal strategies and devise new taxation models.
The Ministry of Energy is expected to issue detailed billing guidelines to power distribution companies (DISCOs) for implementation starting from next month’s billing cycle.
