Prime Minister Shahbaz Sharif on Saturday issued an order to immediately suspend the collection of fixed sales tax through electricity bills from shopkeepers, The News reported.

The prime minister chaired a meeting in Lahore in which the country’s economic situation and the problems of businessmen and their solutions were discussed, in particular the electricity rates and fixed sales tax collection through electricity bills.

While addressing the meeting, PM Shehbaz ordered the Federal Board of Revenue (FBR) to immediately suspend collection of fixed sales tax through electricity bills from small traders and retailers, and devise a new roadmap in consultation with traders for the purpose.

 “An inquiry must be conducted into the levy of increased sales tax ratio on shopkeepers/ retailers in the electricity bills other than that agreed,” he said.

The PM said representatives of traders should be taken on board while making any decision on tax collection through electricity bills.

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 traders community protesting against the levy since July 1.

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

Reiterating his commitment to take all-possible measures for financial security of the poor, PM Shehbaz directed all relevant ministries and authorities to immediately finalise an effective mechanism to reduce electricity rates to provide relief to people.

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

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.