PIAF chairman warns of levying circular debt tax to pay off this liability


Lahore, Nov 26 (Online): The Pakistan Industrial and Traders Association Front (PIAF) chairman Mian Nauman Kabir has warned of any move to levy circular debt tax or increase in power tariff to pay off this debt, as past trend of increasing tariff to control circular debt has totally failed.
In a joint statement with the vice chairman Javed Siddiqi, he called for taking drastic measures and adopting holistic approach in tackling the problems in the sector to address power consumers’ vulnerability, as the circular debt size was Rs1,415 billion in 2018, which was jumped to Rs2,150 billion in June 2019-20 while it skyrocketed by another Rs116 billion in the first quarter of 2020-21 to astounding amount of around Rs2,266 billion.
He called for power sector reforms, considering the matter of overbilling, technical losses, transmission issues, proposal on decentralization of the sector, promotion of off grid solutions, incentives for renewable energy solutions and capacity payments to the independent power producers. He added that if the government failed to take immediate measures the power sector is likely to choke up due to heavy outstanding dues.