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Business Recorder
23-05-2025
- Business
- Business Recorder
NA passes ‘Off the Grid (CPP) Levy Bill'
ISLAMABAD: The National Assembly, Thursday, passed, 'The Off the Grid (Captive Power Plants) Levy Bill, 2025', which states that the rate of levy shall be increased by five percent immediately and further increased to 10 percent by July 2025, 15 percent by February 2026 and 20 percent by August 2026. Federal Minister for Petroleum Ali Pervaiz Malik, presented this money bill in the Lower House of the Parliament for passage, the opposition members opposed it. The House passed the bill with majority. Senate body approves Off-the-Grid (CPPs) Levy Bill, 2025 The clause 03 of the bill states, 'Imposition and collection of levy. - (1) Subject to section 4, every captive power plant shallpay to the federal government a levy on consumption of natural gas or RLNG, over and above the sale price notified under section 8 and section 43B of the Oil and Gas Regulatory Authority Ordinance, 2002, at such rate as notified by the federal government in the official Gazette, from time to time.(2) The agent shall be responsible for billing of levy to captive power plants, its collection and onward payment to the federal government in the manner as may be prescribed.' The clause 04 of the bill further reads, 'Calculation of rate of levy. - Before notifying the levy under sub-section (1) of section 3,the divisions concerned under the Rules of Business, 1973 shall calculate the rate of levy by taking into account the difference of power tariff of industrial B3 category, notified by Nepra, and the self-power generation cost of the captive power plant at the gas tariff notified by OGRA: Provided that the rate of levy shall be increased by five percent immediately and further increased to ten percent by July, 2025, fifteen percent by February, 2026 and twenty percent by August, 2026.' About the utilisation of levy, clause 05 of the bill, says, '(1) The levy shall be utilized by the Federal Government for reduction of power generation tariff for all consumer categories of the power sector.(2) An annual report in respect of the utilization of the levy shall be laid before both the Houses of Majlis-e-Shoora (Parliament) after three months from the end of each fiscal year.' The clause 06 of the bill states:'Consequences for non-payment of levy. - (1) If the amount of levy is not paid within the specified time by the captive power plant, the same shall be recoverable under sub-section (2) and incase of persistent default in payment, the agent shall terminate the gas supplies to the defaulted captive power plant.(2) The amount of levy due but not paid within the time allowed shall be recoverable under the provisions of the Public Finance Management Act, 2019.' Moreover, clause 07 of the bill explains, 'Allowance to be made for levy for purposes of Income Tax. - The levy paid by a captive power plant shall be an expenditure for which allowance is to be made under the Income TaxOrdinance,2001 in computing its profits or gains.' To remove any difficulty for implementation on the law, clause 10 of the bill gives power to the president of Pakistan to settle it. Furthermore, Clause 10 of the bill states, 'Removal of difficulties. - If any difficulty arises in giving effect to the provisions of this Act, the President may make an order, not inconsistent with the provisions of this Act, to remove the difficulty.' Copyright Business Recorder, 2025
Business Recorder
15-05-2025
- Business
- Business Recorder
Senate body approves Off-the-Grid (CPPs) Levy Bill, 2025
ISLAMABAD: Despite opposition from industries in Khyber Pakhtunkhwa, the Senate Standing Committee on Finance approved a government bill – Off-the-Grid (Captive Power Plants) Levy Bill, 2025, on Thursday. Senator Anusha Rehman presided the meeting of the committee held here on Thursday in the Parliament House. The bill will also be moved in the National Assembly Standing Committee on Petroleum Division on Friday (today). Off-the-grid levy on gas-based CPPs: Govt moves copy of proposed bill in Senate Member Committee from Khyber Pakhtunkhwa Mohsin Aziz strongly opposed the bill, labelling it 'anti-Pakistan' and stated that it would lead to the closure of industries after they were previously encouraged to install captive power plants due to a lack of electricity in the country. The chairperson of the committee, Anusha Rehman, countered Senator Aziz's arguments, suggesting his stance appeared to oppose cheaper electricity. Senator Aziz denied this. Senator Rehman then noted that Senator Aziz, being online, his vote would not be counted. Senator Manzoor Kakar expressed his support for the bill, calling it 'very good,' and Senator AnushaRehman echoed this sentiment, highlighting the prime minister's promise to reduce electricity costs. Earlier, Petroleum Secretary Momin Agha briefed the committee on the bill, stating that its purpose is to reduce the burden of capacity utilisation and ultimately lower electricity prices for the general public. He informed the committee that a five percent levy was immediately imposed after the issuance of the ordinance, with the rate set to increase to 10 percent from July 2025, 15 percent in February 2026, and 20 percent in August 2026. Additional Secretary Finance explained that captive power plants were initially asked to shut down, leading companies to seek legal recourse. Consequently, the government decided to impose a levy instead of enforcing closure. He noted that out of 5,500 industrial connections, 1,100 have captive power plants, and these industries are currently operating on normal tariffs. Petroleum Division officials informed the committee about the increasing gas prices for captive power plants, rising from Rs2,750 per MMBTU in February 2024 to Rs3,000 in June 2024 and Rs3,500 in February 2025. On Wednesday, the government had moved a copy of the bill that provides for imposing an off the grid levy on natural gas based captive power plants in Senate session. Deputy Prime Minister Ishaq Dar, in his additional official capacity as Leader of the House in Senate, had moved the bill on the maiden day of the Senate's 350th session. Dar moved the bill in the Senate, which was referred to the Senate Standing Committee on Finance and Revenue. Copyright Business Recorder, 2025
