The Federal Tax Ombudsman (FTO) has uncovered a revenue loss of Rs9.8 billion due to improper taxation in the solar net metering system. To address this issue, the FTO has directed all electricity distribution companies (DISCOs) and the Federal Board of Revenue (FBR) to impose an 18% sales tax on consumers using solar net metering across Pakistan.
The ruling clarifies that the sales tax should be calculated based on the total value of electricity supplied, rather than the net metering system’s calculations, which deduct the energy fed back into the grid. This change aims to ensure that the correct amount of tax is collected and that revenue losses are prevented.
According to the FTO’s findings, K-Electric is already following the proper tax regulations, but other DISCOs have not been complying, leading to significant financial losses for the government. As a result, the FTO has called for an investigation into the financial impact of these violations and has urged authorities to take corrective action.
To ensure fair and consistent taxation, the FBR will oversee the enforcement of this policy across multiple power companies. This move is expected to strengthen tax compliance in the energy sector and recover lost revenue while standardizing taxation for solar net metering consumers.
