Karachi, November 29, 2024 – Karachi’s large taxpayers have paid Rs 12.50 billion as advance tax on electricity consumption during the first four months (July – October) of the current fiscal year 2024-25, according to sources from the Federal Board of Revenue (FBR). The payment marks a significant surge, highlighting a substantial increase in tax collection for the period. The Large Taxpayers Office (LTO) Karachi, which is the primary revenue-generating arm of the FBR, has collected Rs 12.50 billion in advance tax payments on electricity consumption for the four-month period. This amount represents a 128% increase compared to the Rs 5.50 billion collected in the same period last year, according to FBR sources. The increase in tax revenue can be attributed to several factors, but the most significant of these is the unprecedented rise in electricity tariffs over the past year, which has resulted in higher electricity bills and, consequently, higher tax payments. The FBR collects advance tax on electricity consumption under Section 235 of the Income Tax Ordinance, 2001. This section mandates that advance tax is charged on the amount of electricity consumed by commercial, industrial, and certain domestic consumers. The tax is levied on the electricity bills issued to these consumers, and the rates vary based on the amount of the bill and the type of consumer. Key Provisions of Section 235 on Electricity Consumption: • Sub-section (1): Advance tax is collected on electricity consumption at rates specified in the First Schedule of the Income Tax Ordinance. However, domestic consumers listed on the Active Taxpayers’ List (ATL) are exempt from this tax. • Sub-section (2): The electricity bill issuer is responsible for charging the advance tax in the same manner as other charges are applied to the bill, including sales tax and incidental charges. • Sub-section (3): Tax is not collected from individuals who provide a certificate proving their income is exempt or that they have already paid advance tax under Section 147 of the Ordinance. Additionally, individuals whose income is subject to a final tax regime are also exempt. • Sub-section (4): The…