New tax card sets withholding rates for commercial, industrial and non-ATL domestic electricity consumers

ISLAMABAD: The Federal Board of Revenue (FBR) has updated the withholding tax rate card for electricity consumption for Tax Year 2027 under Section 235 of the Income Tax Ordinance, 2001.

The rate card has been updated up to June 30, 2026, in accordance with the Finance Act, 2026, and sets out different withholding tax rates based on the category of electricity consumer and the gross amount of the monthly electricity bill.

Withholding tax on electricity consumption

For commercial and industrial consumers, no withholding tax will apply where the gross monthly electricity bill is up to Rs500.

Where the bill exceeds Rs500 but does not exceed Rs20,000, withholding tax will be charged at 10% of the bill amount.

For bills exceeding Rs20,000, separate rates apply to commercial and industrial consumers.

Commercial consumers will be subject to withholding tax of Rs1,950 plus 12% of the amount exceeding Rs20,000.

For industrial consumers, the applicable tax will be Rs1,950 plus 5% of the amount exceeding Rs20,000.

Tax rates for non-ATL domestic consumers

The FBR has also specified withholding tax provisions for domestic electricity consumers who are not included on the Active Taxpayers List (ATL).

A non-ATL domestic consumer whose monthly electricity bill is below Rs25,000 will not be subject to withholding tax.

However, where the monthly bill is Rs25,000 or more, withholding tax will be charged at 7.5%.

Electricity withholding tax rates for TY2027

Consumer category	Monthly electricity bill	Withholding tax
Commercial & industrial	Up to Rs500	Nil
Commercial & industrial	Above Rs500 to Rs20,000	10% of amount
Commercial	Above Rs20,000	Rs1,950 + 12% of amount exceeding Rs20,000
Industrial	Above Rs20,000	Rs1,950 + 5% of amount exceeding Rs20,000
Non-ATL domestic	Below Rs25,000	Nil
Non-ATL domestic	Rs25,000 or more	7.5%

The FBR said the updated rate card is intended to facilitate taxpayers, withholding agents and other stakeholders in determining their withholding tax obligations on electricity consumption.

The tax authority clarified that the original Income Tax Ordinance, 2001, as amended from time to time, will prevail in case of any contradiction or error in the rate card.

The card also states that it cannot be produced as a legal document before any court or legal forum and cannot be used for statutory proceedings.

The updated rate card provides a consolidated reference for electricity consumption withholding tax applicable during Tax Year 2027.