PEDO’s bank accounts unfrozen after release of token amount
FBR detached account on August 31 to compel dept to pay outstanding dues
A man counts Pakistani Rupee (PKR) notes. PHOTO: REUTERS
The Federal Board of Revenue (FBR) has unfrozen all bank accounts of the Pakhtunkhwa Energy Development Department (PEDO) after the Khyber-Pakhtunkhwa government released Rs400 million for the board.
The FBR had frozen all of PEDO’s account on August 31 to compel the department to pay all its outstanding dues in terms of sales and income taxes over the revenue it has been generating.
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“We have paid a token money of Rs400 million to the FBR on Thursday after which FBR [unfroze] all our bank accounts across the country,” an official of the K-P energy and power department told The Express Tribune.
The token amount was mutually agreed by FBR and the K-P government during a meeting held on September 21. The moot was led by Chief Minister Pervez Khattak.
“It was agreed that after the release of the money, FBR would detach PEDO’s bank accounts and the K-P government would fight its case to obtain tax exemptions for PEDO,” he added.
Officials of FBR’s Peshawar region confirmed that the money has been released as decided and the accounts have been unfrozen. “The issue is old [and has been] running since 2008,” a senior official of FBR told The Express Tribune. “As per the law, they have to pay the tax. The court has also decided the matter in our favour after which we froze the accounts.” According to the official, PEDO owes around Rs3 billion to FBR in terms of sales and income taxes.
Tax exemption
However, the K-P government wants a tax exemption for PEDO on the analogy of Wapda as both generate and sell electricity.
“Wapda is exempted from taxes,” a senior official of the K-P energy and power department told The Express Tribune. “We want tax exemptions for PEDO. Both [Wapda and PEDO] are generating electricity and selling it to National Transmission and Despatch Company (NTDC) Limited. [However], FBR is claiming the taxes from PEDO while Wapda has been tax exempted.”
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Proposed amendments
The K-P government had proposed amendments in Income Tax Ordinance 2001/Amended 2015. It had made a request to enter PEDO in the list of entities which are exempted from taxes. However, the federal government had rejected the request.
The K-P government is taking the issue to the Supreme Court where the former Senate chairperson and lawyer Wasim Sajjad will be pleading the case.
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“We will be holding three to four meetings with FBR over the subject,” the official said. “The outcome [of the meetings] would determine the course of court case.”
“Our projects are located in Malakand Division which is already tax exempted,” the official said. The government is generating electricity from three hydropower projects, including the 81-megawatt Malakand-III hydropower project and the 18-megawatt Pehur hydropower project. The third is 1.8 megawatt Shishi hydropower project.
“Pehur hydropower project is running at a loss since Federal Ministry for Water and Power is not signing the power purchase agreement with us,” the official said. “We are currently selling the electricity of Pehur at Rs1 per unit.”
The FBR had frozen all of PEDO’s account on August 31 to compel the department to pay all its outstanding dues in terms of sales and income taxes over the revenue it has been generating.
Filing Of Goods: FBR, DGTR to impart training
“We have paid a token money of Rs400 million to the FBR on Thursday after which FBR [unfroze] all our bank accounts across the country,” an official of the K-P energy and power department told The Express Tribune.
The token amount was mutually agreed by FBR and the K-P government during a meeting held on September 21. The moot was led by Chief Minister Pervez Khattak.
“It was agreed that after the release of the money, FBR would detach PEDO’s bank accounts and the K-P government would fight its case to obtain tax exemptions for PEDO,” he added.
Officials of FBR’s Peshawar region confirmed that the money has been released as decided and the accounts have been unfrozen. “The issue is old [and has been] running since 2008,” a senior official of FBR told The Express Tribune. “As per the law, they have to pay the tax. The court has also decided the matter in our favour after which we froze the accounts.” According to the official, PEDO owes around Rs3 billion to FBR in terms of sales and income taxes.
Tax exemption
However, the K-P government wants a tax exemption for PEDO on the analogy of Wapda as both generate and sell electricity.
“Wapda is exempted from taxes,” a senior official of the K-P energy and power department told The Express Tribune. “We want tax exemptions for PEDO. Both [Wapda and PEDO] are generating electricity and selling it to National Transmission and Despatch Company (NTDC) Limited. [However], FBR is claiming the taxes from PEDO while Wapda has been tax exempted.”
Panama Papers: Experts term FBR’s tax notices a flawed procedure
Proposed amendments
The K-P government had proposed amendments in Income Tax Ordinance 2001/Amended 2015. It had made a request to enter PEDO in the list of entities which are exempted from taxes. However, the federal government had rejected the request.
The K-P government is taking the issue to the Supreme Court where the former Senate chairperson and lawyer Wasim Sajjad will be pleading the case.
Dar urges FBR to redouble efforts to meet tax collection target
“We will be holding three to four meetings with FBR over the subject,” the official said. “The outcome [of the meetings] would determine the course of court case.”
“Our projects are located in Malakand Division which is already tax exempted,” the official said. The government is generating electricity from three hydropower projects, including the 81-megawatt Malakand-III hydropower project and the 18-megawatt Pehur hydropower project. The third is 1.8 megawatt Shishi hydropower project.
“Pehur hydropower project is running at a loss since Federal Ministry for Water and Power is not signing the power purchase agreement with us,” the official said. “We are currently selling the electricity of Pehur at Rs1 per unit.”