The Federal Tax Ombudsman (FTO) has identified a substantial revenue shortfall of Rs9.8 billion due to incorrect taxation practices in the solar net metering system. To rectify this, the FTO has instructed all power distribution companies (DISCOs) and the Federal Board of Revenue (FBR) to apply an 18% sales tax on consumers utilizing solar net metering nationwide. The tax will be calculated on the total electricity supplied, disregarding the net metering adjustments that account for energy fed back into the grid. This adjustment aims to ensure accurate tax collection and prevent future revenue losses.
The FTO noted that K-Electric has been adhering to proper tax procedures, while other DISCOs have failed to comply, resulting in significant financial losses for the government. Consequently, the FTO has requested an investigation into these financial irregularities and urged authorities to take corrective measures.
To ensure uniform and fair taxation, the FBR will oversee the enforcement of this policy across various power companies. This initiative is expected to enhance tax compliance in the energy sector, recover lost revenue, and standardize taxation for solar net metering consumers.
