Estimates to raise RS9b per anum
The Sindh government has decided to collect Municipal Utility Charges and Taxes (MUCT) via K-Electric bills.
Aimed at improving Karachi Metropolitan Corporation’s (KMC) revenue generation capacity, this decision was taken at a meeting at the Chief Minister House chaired by Sindh Chief Minister Syed Murad Ali Shah.
Although the exact amount of MUCT charges has not been finalised yet, it is recommended by the provincial government that Karachiites should tentatively be asked to pay between Rs100 and Rs200 along with their utility bills.
KMC’s revenue, it is estimated, could go up by as much as Rs9 billion if the plan is implemented.
A Memorandum of Understanding (MoU) would later be signed between the K-Electric and KMC after the finalisation of terms and conditions for the collection of municipal taxes.
The municipal and utility charges are to be adjusted in K-Electric bills just like consumers are made to pay television license Fees.
The Sindh CM expressed the hope that KMC’s revenue would improve after the implementation of this plan, adding that the corporation would be in a better position to perform development work in the Sindh metropolis.
The Sindh CM would soon hold talks with the federal government in this regard so that appropriate legal permission is granted to the provincial government and K-Electric for the execution of the plan.
Murtaza Wahab, the Karachi Administrator, said that this would be a revolutionary plan for the KMC, insisting that KMC would not move to impose any new tax on the people of Karachi.
Wahab said: “The KMC is changing ways of tax collection to curb the tendency of tax evasion. I will explain to the people of Karachi every month how much tax is being collected and where it is utilized.”
Meanwhile, the K-Electric management clarified that the inclusion of any new taxes in KE bills was directly linked with the permission of regulators.
KMC’s Metropolitan Commissioner Afzal Zaidi said that the K-Electric had been issuing utility bills to 3 million consumers in Karachi, adding that if the revenue collection plan was executed in a proper manner, it would greatly increase KMC revenue generation capacity.
The Municipal Utility Charges and Taxes (MUCT) bill was first introduced in 2008. The then CDGK Mayor Syed Mustafa Kamal introduced this bill after the city council approved it through a resolution.
The MUCT bill was basically meant to be an amount paid on a quarterly basis for repairing and carrying out maintenance of infrastructure, including roads, flyover bridges, underpasses and footpaths.
The Sindh government has already made it mandatory for clearing MUCT bills on property owners. After relevant changes were made in property laws, no property could now be sold or bought without clearing MUCT charges.
Later, the imposition of the MUCT bill was challenged in the Sindh High Court by former CDGK Mayor Naimatullah Khan of the Jamaat-i-Islami. Khan viewed these charges to be an extra burden on the people of Karachi people. He had urged the court to revoke MUCT altogether.