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Aftab Maken
ISLAMABAD: The Senate Standing Committee on Finance has approved the proposal to remove the 18% sales tax on the import of solar panels, a move that is likely to offer significant tax relief to consumers amid rising electricity prices.
The committee meeting, chaired by Senator Saleem Mandviwalla, gave its nod to the withdrawal of the controversial tax during a session that also reviewed other key fiscal proposals under the Budget 2025-26.
In another decision, the committee approved a proposal to exempt sales tax on aircraft imports for the privatization of Pakistan International Airlines (PIA), aiming to facilitate the restructuring of the national carrier.
On the other hand, the committee approved an increase in sales tax on small cars — raising it from 12.5% to 18% — a move expected to impact the automobile sector and buyers of economy vehicles.
The 18% tax on solar energy equipment had been originally proposed by Federal Finance Minister Muhammad Aurangzeb while presenting the budget for fiscal year 2025-26. He argued that the tax would create a level playing field between imported and locally manufactured solar panels, thereby supporting Pakistan’s domestic solar manufacturing industry.
However, the move faced strong political opposition. The Pakistan Peoples Party (PPP), a key government ally, rejected the solar tax, stating it would increase costs and make affordable, green electricity inaccessible for many households.
PPP spokesperson Shazia Marri posted on social media platform X (formerly Twitter) that her party would not support the imposition of an 18% sales tax on solar panels, aligning with the growing public sentiment in favor of sustainable energy solutions.
