MEPCO Taxes and Duties
Govt needs funds to perform its functions and duties. Taxes and other income-generation sources arrange these funds. Some taxes are called direct taxes and others are called indirect taxes.
Taxes collected directly from persons like income tax, property tax, profit tax etc are called direct taxes. In contrast, other taxes collected indirectly from consumers in the form of sales tax, duties, service or professional taxes are called indirect taxes.
Indirect taxes are collected mostly through electricity bills, gas bills and other utility bills and sales tax on goods and services etc.
Here we will discuss different taxes and duties included in the MEPCO Bill. If you want to understand your MEPCO Bill, taxes and duties included then click here. You will get detailed information about MEPCO Taxes and duties in this post.
Now you can easily check and download your MEPCO Duplicate Bill online for free. Click to check and download your MEPCO Duplicate Bill
Electricity Duty
It is a provincial tax or duty levied by the Provincial Govt at the rate of 1% to 1.5%. It is a progressive tax, that increases with the consumption of electricity and is calculated based on the electricity price in the bill.
General Sales Tax
It is levied by the Federal Govt under the Sales Tax Act of 1990 at the rate of 17% on the entire amount of the bill. It is applied to the entire amount of the bill which already includes all other taxes. It is also a progressive tax, increasing with the increase in the amount of the bill.
PTV License Fee
Govt has added a new fixed tax for PTV asRs 35/- for domestic users and Rs 60/- for commercial consumers. It does not change with the increase in consumption as it is a fixed tax.
Financing Cost Surcharge
Simply it is called FC Surcharge and it is charged to all categories of consumers, except lifeline domestic consumers at the rate of Rs 0.43 per kWh ( Per Unit ). It is a directly proportional tax as its amount increases as we consume more units.
Fuel Price Adjustment ( FPA )
It is most discussed in all taxes and duties as it affects consumers most. It is levied on the consumption of the consumer’s previous month, in contrast to all other taxes and duties levied on the consumption of the current month. Its result is added to the current month’s bill and consumers suffered the most.
In Pakistan more portion of electricity is produced by thermal means and furnace oil, coal and gas are widely used for this purpose. We import a large part of these fuels and their prices are not stable. The changes in prices of these fuels are shifted to consumers in the form of FPA is electricity bills to all consumers.
Click to get information about Bill Payment
It is a difference in the price of fuel proposed for a month and the actual price for that month. We can explain it in easy words as Govt expected the fuel price for a certain amount like $50 but it was set to $57, now the difference of $7 will be adjusted in consumer bills according to their consumption.
As it is charged for the previous month’s bill, it irritates the consumers and they think that Govt is looting us and sending us bills for previously consumed units. This is adjusted after 3 months.
You can Calculate your bill easily with the help of Bill Calculator if you know the units consumed during a month.
But if fuel prices decrease from the proposed prices, the FPA will be -ve and it will be deducted from consumers’ bills. It becomes a relief for consumers.
Extra Tax
It is not charged to domestic users so it is not a famous tax. It is charged only to commercial and industrial consumers who are not registered in the Active Tax Payer List ( ATL ) of FBR ( Federal Board of Revenue ). It is charged at the rate of 5% to 17% for different bill slabs.
Further Tax
It is charged at the rate of 3% to all consumers who have no Sales Tax Return Number ( STRN ). However, it is not applied to domestic consumers, agriculture consumers, and bulk users. It is also not applied to street light connections.
Income Tax
It is charged at various rates to all consumers who fall into a specific category of consumption. Its rate depends upon slabs and the amount of the bill. It does not apply to lifeline users.
Sales Tax
It is levied on commercial consumers only at the rate of 5% for bills up to Rs 20000/- and 7.5% for bills more than Rs 20000/-.
These taxes and duties are being charged to consumers of electricity and the amount of bill increases due to these.
If you want to verify this information, visit the official site of the Ministry of Power ( Energy Division )
How to Minimise MEPCO Taxes and Duties
Electricity bills are a burning issue these days. This is a hot topic for discussion on mainstream and social media. Electricity prices are too high in Pakistan and consistently increasing at a higher pace. A major portion of electricity price is comprised of taxes and duties.
Here we will discuss some steps to minimise taxes and duties and ultimately decrease MEPCO Bills for consumers.
Stay in Protected Consumers
It should be our top priority to keep our electricity consumption under 200 units per month and should enjoy the leverage of protected consumers. These are charged minimal charges of electricity and are exempted from most of the taxes.
For this, we should opt for a simple lifestyle and try to use energy-efficient appliances like bulbs, fans and other electrical appliances of regular use.
You can apply online for New Connection through a web portal.
Stay in a Lower Slab
In Pakistan, consumers of electricity are billed at different slabs according to their consumption. Govt has introduced a slab system to cover load shedding and shortage of electricity. It charges higher with an increase in the consumption of electricity.
We should try to keep our consumption as a low slab as possible, it will reduce some taxes and the price of electricity.
Apply online for a Bill Subscription to get your latest reading on your phone.
Use Energy Efficient Appliances
Most appliances we use in our homes are based on outdated technology and consume more energy as they are not energy efficient. We should use modern energy-efficient appliances.
We should use modern energy-efficient ceiling fans as they are the main source of energy consumption during summer. This will save a huge amount of energy for us.
We should use modern refrigerators and use them wisely and not use them during peak hours.
If we need to use ACs, we should use them at 26C, they give more performance in this setting and save energy too.
We should use energy savers instead of old bulbs. If you want to know about how to pay your bill, then click to open Bill Payment
Utilise Day Light
We should maximum utilise daylight. In the meantime, avoid using light bulbs. Utilise sunlight to dry our clothes. Keep ventilation in our homes to keep them naturally cool, it will decrease energy consumption and eventually decrease our bill.
Solar Energy
It is a growing means of electricity production. It is most famous too because it produces electricity without any additional cost. The consumer just needs to invest onetime in the purchase of solar panes and their installation and they will produce electricity for up to 25 years.
Consumer who installed higher production plants can sell their extra electricity to National Grid as well. So they can earn money and use electricity free of cost.
If a consumer can not install a larger production unit, he should purchase 1 or 2 solar panels and shift some load of fans on solar energy in the time. It will give relief to his bill.
Need more information about green meters? Then click to read Net Metering in Pakistan.
Register in FBR
Consumers should register themselves with the FBR ( Federal Board of Revenue ) and get a National Tax Number ( NTN ). It will help consumers to get rid of income tax in their bills. If they served income tax in their electricity bills, they can claim tax return in an income tax return at the end of each year.
The commercial and industrial users should get their NTN and keep them on the Active Tax Payer List ( ATL ) to eliminate sales tax from their MEPCO Bills and save 5% to 17%.
Consumers should register their businesses in FBR and get STRN. It will eliminate 3% further tax from their bills.
Conclusion
In our country, prices of electricity are not only high but also increasing rapidly. It affects our lives badly. We should limit our usage to minimise our bill and for this, we should use energy-efficient appliances and follow the steps discussed in this article. We hope this will bring a positive change in your daily routine and consumption of your electricity and this will help you to minimise your bill. If you get a wrong or miscalculated bill, then you can register a complaint against MEPCO online through their web portal.