ISLAMABAD – The government is poised to abolish the proposed 18% sales tax on the import of solar panels, a move expected to cost the national exchequer approximately Rs20 billion in the fiscal year 2025–26.
According to official sources, there is a strong possibility that the proposed tax will be either fully withdrawn or further reduced from the revised rate of 10% currently under consideration.
To offset the revenue shortfall, the Federal Board of Revenue (FBR) is preparing alternative measures to be submitted for approval by Prime Minister Shehbaz Sharif. Among the proposals are an increase in Federal Excise Duty (FED) on imported vehicles and a revision of tax concessions listed in the Eighth (Conditional Exemption) and Sixth (Exemption) Schedules of the Sales Tax Act.
The proposed relief aligns with government efforts to promote clean energy and make solar solutions more affordable, particularly for households and small businesses burdened by high electricity costs.
