Government Confirms No New Taxes for Rs1.56T Revenue Shortfall

The government has firmly declared it will not impose new taxes or levies to offset the Rs1.56 trillion revenue shortfall triggered by revised tariff agreements with state-owned generation companies (Gencos). This follows adjustments aimed at slashing electricity tariffs, delivering massive consumer savings of Rs1.5 trillion.

During a public hearing on Thursday, Power Division officials confirmed that the tariff revisions would not lead to additional taxation. Instead, the government will tackle the revenue loss by cutting consumer subsidies, balancing public relief with power sector sustainability.

Key measures include shifting power plants from the “take-or-pay” model to a “hybrid take-and-pay” system, reducing capacity payments and easing financial pressure on both producers and consumers. Despite concerns over high gas supply costs and financial challenges for power plants, the government is steadfast in its mission to lower tariff impacts.

However, debate persists on whether these changes can resolve the long-term inefficiencies and financial instability plaguing the power sector, raising questions about future sustainability.