ISLAMABAD – In a major relief for the renewable energy sector, the federal government has announced a reduction in proposed sales tax on imported solar panels from 18percent to 10pc, following strong opposition and ongoing budget consultations.
Speaking in the National Assembly, Deputy Prime Minister Ishaq Dar confirmed the decision, stating that the government has revised some of its initial budget proposals.
The move comes after the Standing Committee on Finance rejected the earlier proposal to impose an 18pc sales tax on solar panels.
Dar also noted that consultations with coalition partners on the federal budget are still underway. Addressing concerns on digital services, he clarified that the authority to tax digital services lies with the provinces, not the federal government.
In another key announcement, the deputy prime minister said the government is increasing the allocation for universities in Sindh from Rs 2.6 billion to Rs4.6 billion, aiming to strengthen higher education in the province.
The reduction in solar panel tax is expected to boost clean energy adoption and reduce costs for consumers, aligning with Pakistan’s broader goals for sustainable development and energy self-sufficiency.
On June 10, Finance Minister Muhammad Aurangzeb proposed, during the 2025–26 budget speech, an 18 percent tax on imported solar panels to promote local manufacturing.
The proposal was met with strong opposition, particularly from PML-N allies which argued that tax would make clean energy less affordable for the average citizen.
In 2024-25, Pakistan – the fifth most populated country – emerged as the largest importer of solar panels in the world, bringing in a record 70 gigawatts in 2024.
