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Controversy Surrounds Karachi Agreement Allowing K-Electric to Collect Municipal Utility Charges and Taxes
Karachi Metropolitan Corporation and K-Electric agreement under scrutiny as details reveal deductions from controversial tax collection.
ND
by News Desk
2024-05-06
Controversy Surrounds Karachi Agreement Allowing K-Electric to Collect Municipal Utility Charges and Taxes

An agreement between the Karachi Metropolitan Corporation (KMC) and K-Electric (KE) has sparked controversy, as it allows KE to collect Municipal Utility Charges and Taxes (MUCT) on behalf of KMC with notable deductions. The agreement, brought to light in compliance with a court order, outlines deductions for service fees, electricity bills, and outstanding dues owed by KMC to KE.

 

According to the agreement, KE is authorized to deduct a 7.5% service fee from monthly MUCT collections, along with KMC's electricity bills and outstanding dues owed by the corporation. Additionally, 50% of the remaining monthly MUCT collection is to be deducted against KMC's outstanding electricity dues to KE.

 

The agreement, signed in June 2022, acknowledges outstanding electricity dues of Rs1.562 billion owed by KMC to KE as of July 2022, to be deducted by KE at source.

 

Furthermore, the agreement stipulates that KE will collect MUCT from domestic and non-domestic consumers of electricity through their monthly power bills, as per consumer categories notified by KMC.

 

The agreement also addresses termination clauses, with KE retaining the right to terminate the agreement with a 30-day advance notice, without assigning reasons.

 

This development comes amidst legal challenges, with petitions filed against the provincial government's decision to outsource MUCT collection to KE. Senior lawyer Munir A. Malik, appointed as amicus curiae, argued against the legality of such arrangements, highlighting the need to adhere to contract rules and avoid coercive tax collection methods.

 

The matter is set to be heard again by the Sindh High Court on April 24, with ongoing scrutiny over the legality and implications of the agreement between KMC and KE.

 
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