The decision will result in loss of revenue shortfall of Rs30 billion.

ISLAMABAD    -   Succumbing to the pressure of traders, the federal government on Thursday has announced to withdraw the fixed tax for retail­ers on electricity bills for one year.

Federal Minister for Finance and Revenue Miftah Ismail has an­nounced to withdraw the fixed tax rates on electricity bills for trad­ers for one year on the demand of the business community. He said that Prime Minister (PM) Sheh­baz Sharif and Maryam Nawaz had given instructions to with­draw the tax. Federal Minister for Power Khurram Dastgir Khan said that the government and busi­ness community would devise the future roadmap after three months. He said that the govern­ment has withdrawn fixed tax system for traders. The ministers made these remarks while talking to the media after holding media with the business community. In annual budget, the government had announced fixed tax regime for the retailers. Tax was charged on the monthly electricity bills as Rs3,000 for monthly bill up to Rs30,000, Rs5,000 if the monthly bill exceeds Rs30,000 but does not exceed Rs50,000, and Rs10,000 for monthly bill over Rs50,000. However, the business community had expressed serious concerns over the decision.

The business community had expressed serious concerns when the tax was included in electric­ity bills for the month of July. Initially, the government had an­nounced the withdrawal of a fixed tax on small traders with electric­ity consumption of less than 150 units per month in a bid to calm angry traders who have been pro­testing. However, later, the Prime Minister and Maryam Nawaz had directed the finance minister to resolve the issue with the busi­ness community. The federal gov­ernment and business communi­ty were negotiating from last few days over the issue of fixed tax on electricity bills for the trad­ers. Officials informed that the government would promulgate Presidential Ordinance to with­draw the tax. The decision would result in loss of revenue shortfall of Rs30 billion. Meanwhile, the government is contemplating to impose tax on other sectors to offset the Rs30 billion.