Karachi, October 28, 2024 – In a record-breaking surge, Pakistan’s tax authorities reported a 176% increase in revenue collection from advance tax on electricity consumption during the first quarter of fiscal year 2024-25, spanning July to September. The dramatic rise, attributed to escalating power tariffs, underscores the financial strain on consumers while offering the Federal Board of Revenue (FBR) a substantial revenue boost. The FBR collected Rs 10.40 billion in advance tax from electricity consumption in the first quarter of FY2025, a marked increase from Rs 3.77 billion collected in the same period last year, sources within the FBR confirmed. This increase was largely driven by sustained hikes in electricity charges, which have intensified over recent months, fueled by ongoing capacity payment challenges in the energy sector. Under Section 235 of Pakistan’s Income Tax Ordinance, 2001, the FBR levies advance tax on electricity bills issued to commercial, industrial, and domestic consumers. According to the law, rates are defined in Division IV of Part IV of the First Schedule and applied directly to the billed electricity amount. However, there are provisions for exemption; domestic consumers listed on the Active Taxpayers’ List (ATL) are not subject to the advance tax on their electricity bills, offering some respite for individual households. Sources highlighted that the advance tax on electricity consumption is calculated on the entire electricity bill, including all incidental charges, such as sales tax, to ensure a comprehensive tax application. Electricity providers are…