Electricity bills in Pakistan have become more than just a payment for power consumption—they have also become an important channel for tax collection. According to a briefing presented to the Senate Standing Committee on Finance and Revenue, the Federal Board of Revenue (FBR) has collected a total of Rs1.866 trillion in sales tax and income tax through electricity bills over the last four fiscal years.
The figures shared during the committee meeting reveal that tax collections have remained consistently high. The FBR collected Rs312.8 billion in FY2022–23, Rs515.5 billion in FY2023–24, Rs562 billion in FY2024–25, and Rs476.1 billion during FY2025–26.
Breakdown of FY2025–26 Collections
In the latest fiscal year, the FBR collected Rs476.1 billion through electricity bills. Out of this amount, Rs351.8 billion came from sales tax, while Rs124.4 billion was collected as withholding income tax.
The sales tax included several components, such as standard sales tax, extra tax, further tax, and tax on electricity supplied to retailers. Meanwhile, the withholding income tax was mainly deducted from industrial and commercial electricity consumers, with smaller contributions from domestic non-active taxpayers and collections made under Section 235A.
FBR Rejects Reports of Rs620 Billion Collection
During the meeting, FBR Chairman Rashid Langrial dismissed media reports suggesting that the tax authority had collected Rs620 billion through electricity bills. He described the reported figure as inaccurate and clarified that the official data presented to the committee reflects the actual collections.
Possibility of Higher Taxes on the Power Sector
The FBR chairman also pointed out that the electricity sector currently enjoys significant tax concessions despite its major contribution to Pakistan’s economy. He suggested that if these concessions are reviewed or reduced, the sector could face higher tax liabilities in the future.
This statement indicates that tax policy for the power sector may remain under discussion as the government looks for ways to increase revenue while balancing economic priorities.
Concerns Raised Over Rising Electricity Bills
Members of the Senate committee expressed concern about the growing financial burden on consumers. Senator Kamil Ali Agha argued that multiple taxes added to electricity bills have made power increasingly expensive for households and businesses. He referred to reports claiming that electricity costs had reached around Rs85 per unit, making monthly bills difficult for many consumers to manage.
The senator also questioned the practice of collecting different taxes through electricity bills, describing it as an added burden on citizens.
FBR Defends the Tax System
Responding to these concerns, Chairman Langrial explained that charging sales tax on electricity is a common practice in many countries because electricity is treated as a taxable commodity. He also highlighted that a large portion of the withholding income tax collected through electricity bills is adjustable.
According to the FBR, between Rs400 billion and Rs500 billion in adjustable withholding tax remains unclaimed every year. Taxpayers who file their income tax returns can claim refunds or adjustments where they are eligible, but many people do not complete the process.
Looking Ahead
The discussion reflects the broader challenge of balancing government revenue generation with the affordability of electricity. While the FBR views electricity bills as an efficient way to collect taxes, lawmakers continue to raise concerns about the impact on consumers already facing high energy costs.
As Pakistan continues to reform its tax and energy sectors, the debate over taxation through electricity bills is likely to remain a key policy issue. Future decisions regarding tax concessions, electricity pricing, and consumer relief will play an important role in shaping both government revenues and household expenses.