ISLAMABAD: The federal government is reviewing a proposal to withdraw the sales tax (ST) exemption currently applicable to solar panels in the upcoming 2025-26 federal budget, Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial confirmed on Thursday.
Responding to a question during a Senate Standing Committee on Finance meeting at Parliament House, Langrial stated that the FBR is examining options to phase out various tax exemptions, including those for imported solar equipment. The move, if finalized, could impact the affordability of solar energy solutions amid growing demand for clean power.
Meanwhile, during a National Assembly Finance Committee session, refinery sector representatives raised concerns over the inconsistency of being taxed on inputs without GST on output. They warned this unresolved tax imbalance has deterred potential \$6 billion investments.
Chairman FBR acknowledged the issue, explaining that the sector had effectively exited the Value Added Tax (VAT) regime due to zero-rated output. He added that potential solutions, including the imposition of output tax or a permanent fix, are under active consideration.
In another matter, Langrial assured the committee he would investigate the reported recovery of over Rs 80 million from KababJee restaurant in Karachi. MNA Mirza Ikhtiar Baig claimed the recovery occurred without a proper hearing and said the restaurant owner is now in severe distress.
The committee also deliberated on the Income Tax (Second Amendment) Bill, 2025, and recommended its passage following assurance from the Revenue Secretary to delete a controversial clause affecting tax applicability post-2025.
Further agenda items, including questions on Section 99D of the Income Tax Ordinance and digital currency regulations, were deferred to the next meeting. A report on non-implementation of minimum wage standards in federal departments was also postponed due to the absence of the mover.
Story by Sohail Sarfaraz
