“The government has revised several aspects of the budget following consultations with our coalition partners,” said Dar.
Pakistan Cuts Solar Panel Sales Tax from 18% to 10% to Boost Renewable Energy. In a significant move aimed at promoting renewable energy adoption in Pakistan, the federal government has announced a major reduction in the sales tax imposed on solar panels. The revision comes as part of the updated federal budget proposals for the fiscal year 2025–26.
Deputy Prime Minister Ishaq Dar, addressing the National Assembly on Tuesday, revealed that the previously proposed 18% sales tax on solar panels has now been cut to 10%. The reduction follows widespread criticism and recommendations from stakeholders and parliamentary committees.
“The government has revised several aspects of the budget following consultations with our coalition partners,” said Dar. He emphasized that the adjustments reflect the government’s commitment to sustainable development and easing the financial burden on consumers opting for clean energy.
The initial decision to impose an 18% sales tax on solar panels had sparked considerable backlash from both industry experts and lawmakers. The National Assembly’s Standing Committee on Finance, chaired by Naveed Qamar, had rejected the proposal earlier this week.
During the committee’s meeting, Chairman of the Federal Board of Revenue (FBR) clarified that while solar cells and fully assembled imported solar panels remain exempt from sales tax, certain components imported for local assembly were subject to taxation. However, committee members questioned the logic behind taxing any part of renewable energy infrastructure.
“If we are serious about promoting renewable energy, we cannot afford to impose such taxes,” said committee member Mirza Iftikhar. He further criticized the quality of locally manufactured solar panels, stating they are costlier and inferior compared to imported alternatives.
