Nonprofit entity: KWSB seeks tax exemption from FBR

KWSB is facing a financial nightmare as it provides water, sewerage facilities to 20 million below market cost.

KARACHI:

The Karachi Water and Sewerage Board (KWSB) sought exemption from paying taxes to the state, and justified it by saying that it runs on a non-profit basis and simply does not raise enough money by selling water to the city’s resident, according to a statement issued on Thursday.

KWSB managing director Misbahuddin Farid has requested the Federal Board of Revenue (FBR) to exempt the public utility from paying all taxes, in particular the general sales tax (GST).

KWSB supplies water from reservoirs located 200 kilometers away from the city through a systematic pumping process, through several stations. “KWSB’s monthly electricity bills, which [can to go up to] Rs350 million, include GST,” the company complained. “KWSB also pays taxes on the raw materials it uses in its development projects.”

It is not surprising that the water utility finds itself facing a financial nightmare, as it provides water and sewerage facilities to 20 million customers well below market cost.

While further explaining his company’s demand for being granted tax exemption, Farid said that KWSB was the country’s largest public institution based on technical operations and therefore it should not be considered like any other commercial organisation.

Published in The Express Tribune, August 17^th, 2012.