Karachi, April 9, 2025 – The Karachi Chamber of Commerce and Industry (KCCI) has urged the government to adopt a data-driven strategy for tax broadening by utilizing electricity consumption records to identify potential taxpayers.
In its detailed tax proposals for the fiscal year 2025-26, KCCI emphasized the urgent need to expand the tax base without increasing the burden on already compliant taxpayers.
KCCI pointed out a major gap in the tax net: millions of businesses and individuals remain outside the formal tax system despite being traceable through various data sources. These include electricity and gas connections, property registrations, telephone usage, motor vehicle records, travel logs, and bank accounts. The chamber argued that failure to leverage such data has led to an unequal distribution of the tax burden, over-reliance on measures like the Further Tax, and substantial revenue losses for the national exchequer.
The KCCI specifically recommended that the government use data from authorities such as WAPDA and K-Electric (formerly KESC) to bring unregistered commercial and industrial electricity consumers into the tax net. According to NEPRA data from June 2024, there are approximately 4.6 million commercial and industrial electricity connections across Pakistan, yet only about 396,000 entities are currently registered for sales tax.
By cross-referencing electricity usage data with tax registration records, KCCI believes the government can efficiently identify entities that are conducting taxable activities but are not paying their fair share. The chamber stressed that such an approach would expand the tax base without imposing new taxes, thereby promoting fairness and reducing dependence on coercive tax measures.
KCCI asserted that bringing unregistered electricity consumers into the formal tax system would not only increase government revenue but also enhance taxpayer confidence and voluntary compliance. “It’s time to shift from punitive taxation policies to intelligent, data-backed solutions,” a KCCI representative noted.
The proposal aligns with the broader goal of tax reform in Pakistan—making the system more inclusive, transparent, and equitable. KCCI reiterated that such initiatives are essential for sustainable economic growth, and urged the government to include these recommendations in the upcoming federal budget.