The federal government has decided to cut the proposed sales tax on solar panel imports from 18% to 10% after discussions with coalition partners
Lawmakers had pushed for a complete exemption, urging the government to reduce the tax to zero. However, due to Pakistan’s commitments under its agreement with the International Monetary Fund (IMF), a 10% sales tax on previously zero-rated items is mandatory.
Read more: Solar Battery Prices Fall Following Historic Drop in Solar Panel Cost
Despite pressure for full exemption, the government opted to lower the proposed tax rate from 18% to 10%. An official announcement regarding the revised rate is expected soon.
Sources said the IMF deal requires two main conditions: a 10% sales tax on items that were previously zero-rated, and an increase to 18% where the sales tax already exceeds 5%.
Later, Deputy Prime Minister Ishaq Dar confirmed in the National Assembly that the government would reduce the proposed 18% sales tax on solar panel imports to 10% in the upcoming budget.
