Miftah Ismail proposes plan to cut household electricity costs by 24%

Ex-finance czar suggests cutting sales, govt expenses, income taxes on power bills, reduce size of PSDP by Rs50b

Former finance minister and leader of the newly formed Awam Pakistan Party, Miftah Ismail, has proposed a formula to reduce electricity costs.

Speaking at the Karachi Press Club on Saturday, Ismail suggested that the government eliminate sales tax and advance income tax on electricity bills for domestic consumers from July to September.

This measure, he claimed, would reduce household electricity bills by 24%.

The former finance czar emphasised the need for the government to cut its own expenses, arguing that high electricity bills contribute to political instability in Pakistan and distance the ruling party, PML-N, from the public.

"Those in power who ask the people to make sacrifices must also be willing to do the same," he stated.

Ismail also proposed a reduction in capacity charges, noting that 46% of these charges go to the federal government. He called for a reduction in taxes on furnace oil and LNG, as well as on four government-owned LNG plants.

Additionally, he suggested eliminating taxes on fuel for power plants operating on the grid.

The former finance minister urged the government to cut expenditures for National and Provincial Assembly members by Rs400-500 billion and to reduce the size of the Public Sector Development Programme (PSDP) by Rs50 billion.

Ismail warned that high electricity bills are causing political instability in Pakistan. He noted that any default on sovereign guarantees to Chinese Independent Power Producers (IPPs) would severely damage the national economy.

He criticised the burden placed on the middle class and salaried individuals due to electricity theft and line losses.

The Awam Pakistan Party plans to hold a symbolic protest outside the K-Electric office on Sunday, urging citizens to join in large numbers. Ismail called for a shift in mindset towards public service in Pakistan, stating that the electricity department is failing to serve the public, especially in rural areas where load shedding is rampant despite high bills.

In response to a question, Ismail advised the State Bank of Pakistan to lower interest rates on Monday in line with the reduction in inflation.