ISLAMABAD: In a rare display of bipartisan agreement, parliamentary committees on Tuesday unanimously rejected the proposed 18% sales tax on imported solar panels.
The Senate and National Assembly Standing Committees on Finance and Revenue reviewed the Finance Bill 2025-26 clause by clause and recommended scrapping the solar panel tax.
Lawmakers argued that since solar panels are not produced locally, the tax would only increase electricity costs and limit access to affordable renewable energy.
The Federal Board of Revenue (FBR) had defended the tax as necessary to protect domestic manufacturers, but committee members questioned this given the absence of local production.
Members also raised concerns about recent dumping of imported solar equipment ahead of the proposed tax hike, which could harm the market.
Focus on Small Cars and Tax Enforcement Debate
The committees also expressed concerns over the proposed increase of GST from 12% to 18% on small vehicles, including 850cc cars, calling it unfair to low-income groups.
Proposals were made to reduce the tax to around 14-15% to ease the burden on consumers.
In contrast, a sales tax exemption was approved for aircraft imports linked to the PIA privatization plan.
A heated debate unfolded around new tax fraud enforcement measures. Some lawmakers criticized the FBR’s aggressive tactics, likening them to “martial law-style” regulations, while the FBR chief defended the necessity of these powers under a democratic government.
Meanwhile, the government plans to regulate iron scrap imports to prevent commercial manipulation and calls for clearer rules on taxation of digital services.
Pakistan’s rapid growth in solar power generation remains a key context for these discussions.
