In a major relief for clean energy users, the Senate’s Standing Committee on Finance has approved the proposal to abolish 18% sales tax on imported solar panels. The meeting, chaired by Senator Saleem Mandviwalla, also endorsed several other tax-related changes during the session. This move comes after widespread public and political opposition to the proposed tax on solar energy products.
Earlier, Finance Minister Muhammad Aurangzeb had announced the tax in the 2025–26 federal budget. He said the tax aimed to balance competition between imported and locally produced solar panels. The government believed this step would support the local solar manufacturing industry. However, the proposal was met with resistance from both the public and political allies.
The Pakistan Peoples Party (PPP), a key government ally, strongly opposed the tax. Party spokesperson Shazia Marri stated on social media that PPP would not support the 18% tax. She argued the tax would push cheap electricity out of reach for many citizens. Her statement added pressure on the government to reconsider the tax policy.
In addition to the solar panel decision, the committee approved sales tax exemptions for aircraft imported for PIA’s privatization. It also agreed to raise the sales tax on small cars from 12.5% to 18%. These decisions reflect a balancing act between encouraging investment and generating revenue amid economic challenges.
It’s worth noting that Pakistan became the world’s largest importer of solar panels in 2024. According to UK-based energy think tank Ember, the country imported over 70 gigawatts worth of panels last year. With this latest tax relief, the government is signaling renewed support for clean energy access and easing financial pressure on consumers.