LAHORE: Prime Minister Shehbaz Sharif “immediately suspended” on Saturday fixed sales tax collection through the electricity bills and directed officials to formulate a new mechanism in this regard.

“An inquiry must be conducted over the levy of increased sales tax ratio on shopkeepers/retailers, in the electricity bills other than the agreed one,” he said while presiding over a review meeting on the electricity rates and fixed sales tax collection through electricity bills in Lahore.

The development comes after the government decided to withdraw a fixed tax regime on electricity bills for one year on August 4. The breakthrough was achieved after three days of talks between the government and the traders’ community that has been in protest against the levy since July 1.

“The decision was taken as per the demands of all traders’ community, Prime Minister Shehbaz Sharif and PML-N leaders’ instructions,” Finance Minister Miftah Ismail had said after meeting with them in Islamabad.

Receiving tax from traders via their electricity bill was one of the clauses approved by the National Assembly in the Finance Bill 2022 on July 29, prompting the community to protest over the tweaks.

The meeting was attended by Energy Minister Khurram Dastagir, Finance Minister Miftah Ismail, State Minister for Petroleum Musadik Malik, the Federal Bureau of Revenue chairman, relevant federal secretaries and other senior officials.

PM Shehabaz asked for the inclusion of representatives of traders in the consultation process, prior to taking any decision with regard to the collection of taxes from shopkeepers through the utility bills.

He also directed the relevant authorities and ministries concerned to immediately devise an effective mechanism for slashing the power rates for the poor while resolving that the government would take all steps for the economic protection of the poor segments of society.