The National Assembly and Senate finance committees have rejected the proposal to impose an 18% sales tax on solar panels, citing concerns about its negative impact on renewable energy adoption. The decision came during deliberations on the Finance Bill for 2025-26, which includes reforms to broaden the tax base.
The committees, led by Syed Naveed Qamar, unanimously opposed the tax, warning that it could discourage the shift toward solar energy. The FBR clarified that the tax would target imported components for local assembly, not ready-to-install panels, but this did not alleviate the committee’s concerns.
Finance Minister Muhammad Aurangzeb supported the committee’s rejection, emphasizing that the price of solar panels had decreased, making them more affordable. He assured that alternative measures, like higher taxes on soft drinks and carbon levies, would help meet revenue targets.
Additionally, the committee reviewed amendments to address tax fraud, proposing arrests for fraud over Rs50 million with safeguards to prevent abuse of power. They also discussed reducing subsidies, including those for the solar sector, and tightening enforcement against unregistered entities.
