FTO decision upholds KE’s commitment to financial best practices

March 01, 2025 (MLN): K-Electric (KE) welcomes the Federal Tax Ombudsman’s (FTO) recent decision affirming the company’s full compliance with prescribed laws on sales tax implementation.

This underscores KE’s adherence to best financial and business practices in line with regulatory requirements.

The decision also highlights KE as the power distribution company in Pakistan that had proactively implemented the correct tax treatment, charging and depositing the sales tax and income tax on gross electricity supply, as per the prescribed laws.

This comes at a time when strengthening national revenue collection remains a priority, according to the press release.

Earlier this week, the FTO raised the issue of different treatment by K-Electric and XWDISCOS regarding the charging of taxes on net metering customers, resulting in revenue loss to the Government of Pakistan.

Following an inquiry, the FTO directed all 11 state-owned DISCOs to align their taxation practices with KE’s approach, ensuring compliance with the regulatory framework.

Chief Financial Officer K-Electric, Muhammad Aamir Ghaziani, commented: This decision reinforces KE’s commitment to upholding the highest financial and governance standards in all areas of our operations.

Transparency, regulatory compliance, and robust financial controls are at the core of KE’s practices, and we are pleased that the FTO’s review validates our approach.

As a responsible corporate entity, we remain dedicated to following all applicable laws and ensuring that our financial management aligns with national and international best practices, he added.

As a publicly listed company, KE operates under strict governance frameworks, with financial disclosures reviewed by independent auditors and regulatory bodies in accordance with PSX bylaws and global accounting standards.

The company’s adherence to financial prudence has reinforced investor confidence, enabling investments of approximately $4.4 billion across the power value chain since privatization.

As part of the company’s 7-year plan from 2024–2030, KE has already received approval from the regulatory authority to invest a further $2bn across its transmission and distribution functions.

These targeted investments have positioned KE as the most improved distribution company in Pakistan, with significant reductions in Transmission & Distribution (T&D) losses and Aggregate Technical and Commercial (AT&C) losses.

On the generation side, the utility has significantly improved generation efficiency post-privatization as well.

KE remains committed to enriching customer experience through operational excellence, regulatory compliance, transparency, and driving sustainable growth for Karachi and Pakistan’s energy sector.

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