Senate session: Cellular firms paying pittance in tax, says ministry

Independent power producers allowed 15% profit.

ISLAMABAD:

The five cellular companies operating in Pakistan have paid only Rs14.6 billion in tax during the last four years against a profit of Rs194.9 billion during the period, according to a ministry in-charge of the cabinet division while responding to a question in senate forwarded by Senator Karim Ahmed Khawaja on Thursday. No cellular company incurred a loss during the four years.

The ministry of water and power also informed the house that the government has allowed Independent Power Producers (IPPs) to earn 15 per cent profit from their investment in the business.

In a written reply to the house, the ministry explained that the profit depends upon the amount of equity invested in the project.

For example, in the case of HUBCO’s Narowal Project of 213.82 MW, the equity portion of the total project cost is $80 million and the IPP is allowed to earn Rs7.12 million annually by equating it at the current dollar rate. And in the case of Nishat Power Ltd’s 195.3 MW project, the equity portion of the total project cost is $46 million and the total profit allowed  is Rs4.35  million annually.



To a supplementary question, the state minister for parliamentary affairs Sheikh Aftab said that the IPPs’ audit report will be completed by the end of May 2014 and shared with the parliament.

State Minister for Water and Power Abid Sher Ali said that of the total Rs500 billion circular debt, only Rs150 billion was paid to the IPPs and the remaining will be paid to PSO and others and an audit of Rs150 billion conducted.

Published in The Express Tribune, April 18^th, 2014.