The Sindh High Court (SHC) has stopped the Karachi Metropolitan Corporation (KMC) from collecting municipal tax in areas that fall under the jurisdiction of Karachi’s cantonment boards. The decision was announced on Wednesday during a hearing on a petition challenging the collection of Municipal Utility Charges and Tax (MUCT) through electricity bills.
KMC had been collecting the municipal tax by adding MUCT to monthly bills issued by K-Electric (KE). Residents of Cantonment Board Malir filed the petition, arguing that the inclusion of these municipal charges in KE bills was unlawful.
In its ruling, the SHC stated that only cantonment boards have the authority to collect municipal taxes within their boundaries. The court directed K-Electric to immediately stop collecting MUCT from residents living in cantonment areas.
During the proceedings, the petitioner’s lawyer highlighted that the Malir Cantonment Board was already charging a conservancy tax. Despite this, KMC had imposed additional municipal tax through electricity bills. The lawyer argued that two different bodies were collecting taxes simultaneously, which created an unfair burden on residents.
He added that KMC had no legal authority to collect taxes in cantonment zones, where the cantonment board already imposes higher charges. The petitioner sought a complete ban on both KMC and K-Electric from collecting any municipal taxes in these areas.
The issue of MUCT has been a subject of public debate for months. In September 2025, Karachi Mayor Murtaza Wahab said that the city was collecting Rs200 million in municipal tax and had gathered nearly Rs2 billion over the previous year. He also stated that MUCT was being collected through a private company.
Mayor Wahab further noted that Jamaat-e-Islami’s Saifuddin had raised the municipal tax issue in court again, despite not objecting when the budget was approved. He criticized political opponents for previously allowing practices such as illegal road cutting and billboard installation.
The SHC’s ruling is expected to bring relief to residents of cantonment areas, who have long complained about overlapping taxes and unclear administrative authority.
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