REAP, PSA demand immediate withdrawal of tax proposal to impose 17pc GST on renewable energy equipment in Pakistan

KARACHI: Both the Renewable & Alternative Energy Association of Pakistan (REAP) and the Pakistan Solar Association (PSA) have urged the federal government to immediately withdraw its proposal to impose 17 per cent GST on solar and wind power generation equipment as otherwise Pakistan’s continuing drive to ensure its energy security through clean power sources would be severely compromised.

A press statement issued by the REAP quoted its Chairman, Muhammad Tariq Khattak, as saying that this highly controversial and ill-conceived proposal could set the nation on an accelerated energy poverty slide that is already spiralling out of control.

The REAP Chairman said the little relief that solar PV was providing to the residential, commercial and export-oriented industry in terms of cheaper electricity would immediately vanish if the proposal was implemented.
“This alone would push Pakistan exporters out of competition as resultantly financial losses for the nation would increase due to reduced exports,” said Mr Khattak. The highly commendable green energy targets of the present government to have at least 30% renewable energy in energy basket of the country by 2030 would become impossible to achieve if the proposed taxes are imposed as such, he added. He requested the federal government to consider the withdrawal of proposal.

In his appeal to the Prime Minister, the PSA Chairman, Rana Ghulam Abbas, said the National Renewable Policy aimed to acquire a 30 per cent share of renewables in the energy mix by 2030, however, the recent imposition of exorbitant sales tax on solar panels, solar inverters, and related equipment by the government, creates a substantial hindrance in achieving these targets, thus jeopardising the very essence of its own Renewable Energy Policy.

“The honourable Prime Minister, Mr Imran Khan, has always supported green energy and the environment, the billion-tree programme is a great example. Therefore, to serve a greater purpose, to enhance the economy on the macro scale, and to bring the country on the path of sustainable growth, it is hereby requested to retain the trust of the renewables industry and review the new tax laws,” said the PSA Chairman.

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