Collection of municipal tax through power bills provokes public outcry

The Karachi Metropolitan Corporation (KMC) and K-Electric (KE) have been under fire since the former authorised the latter to collect municipal charges from the people of Karachi through power bills.

The KMC, however, says that the tax is not new. “Only tax collection mechanism has been changed,” KMC Municipal Commissioner Afzal Zaidi said while talking to The News. The tax was being collected since ages in different forms and those who would not pay monthly municipal taxes, would have to pay its collective amount when they had to sell their property, he explained.

While various political parties have rejected the Sindh government and KMC’s move calling it an effort to fleece the people of Karachi, people have resorted to a unique protest in which they are throwing garbage inside KE vans and outside their offices.

In one of the videos making rounds on social media, citizens could be seen stopping a KE vehicle and dumping garbage from garbage cans inside it and asking the KE staff to start collecting domestic waste as they were now charging them for it.

In another video of North Karachi, citizens could be seen dumping garbage at the entrance of a KE office in a bid to protest against the authorisation of KE to collect municipal taxes.

Meanwhile, the KMC aims at earning an estimated Rs3 billion yearly by collecting municipal utility charges and taxes (MUTC), through the KE power bills. As per an agreement signed between the two, the power utility would keep seven per cent of the amount as its collection charges, which amounts to Rs300 million. The power utility would collect the tax from 24 million units across the city.

The MUCT would be collected based on the volume of power bills. For 200 units, Rs50 would be collected. For more units, Rs150 to Rs200 would be collected. Earlier, an official of KMC said, it had been decided that the industrial units would pay Rs5,000 each, but now the amount had been reduced to Rs200 so that everyone could pay it easily.

Urban planner and senior researcher Muhammad Toheed said that the KMC must specify against which service it was collecting the MUCT. The public, he stressed, wanted to know where their tax money would be spent. He said that the metropolitan corporation should at least start providing facilities before collection of such taxes.

Public, he stressed, could pay tax but the KMC should also deliver. He asked it the state institution was so crippled that it could not collect its own tax and needed the help of a private entity.

Toheed also pointed out that the KMC did not have jurisdiction in the cantonment areas. He asked how the KE could collect KMC’s municipal taxes in the areas out of the KMC’s jurisdiction.

Responding to these objections, the KMC municipal commissioner said the power utility was not collecting the MUCT from the cantonment areas. If units in cantonment areas had been charged, he said, it must be an error and could be reversed.

Responding to a question about the service against which the tax was being collected, he clarified that it was for drainage cleaning, fire extinguishing and conservancy services. He stressed that the tax being collected from the public would only be spent on the development of the city and no current expenses of the KMC, such as pensions and salaries, would be paid off through this tax.

Commenting on the controversy, a spokespersons for the KE said, “The authority of imposing or removing taxes lies with the federal and provincial governments. The K-Electric is legally bound to follow the government’s instructions on implementation of taxes. Any further information about the utilisation of municipal taxes is beyond the KE’s scope. The KMC can however be contacted in this regard.”

The KE official remarked that the unusual way of protest by dumping garbage in vehicles revealed how gigantic the problem of garbage was for the residents of Karachi. “There is an absolute need to induce policies, such as waste-to-energy, so that garbage could be used in a beneficial and meaningful way. As a responsible corporate citizen, K-Electric is also considering ways to overcome the challenge of garbage in the city through its corporate social responsibility initiatives,” he said.