The federal government has decided to reduce the sales tax on imported solar panel parts from 18% to 10%, said Finance Minister Mohammad Aurangzeb during a Senate session. He explained that the earlier 18% tax was introduced to support local solar industry growth and create a fair competitive environment.
After extensive consultations and suggestions from members of both parliamentary houses, the government showed flexibility and lowered the tax rate. This new 10% sales tax will apply only to 46% of imported solar parts, while solar panel plates will be taxed at a much lower rate of 4.6%.
The Finance Minister also warned against hoarding and profiteering related to solar equipment, which has been reported even before the tax reduction took effect. He assured that strict legal actions will be taken against those trying to exploit the situation.
Aurangzeb highlighted the government’s success in controlling inflation, improving the current account balance, and increasing foreign exchange reserves without introducing a mini-budget last year. He said these steps aim to stabilize Pakistan’s economy and encourage sustainable development.
Additionally, the government has eased income tax rates for low and middle-income earners. Tax on people earning between 600,000 to 1.2 million rupees annually has been reduced from 2.5% to 1%. Pensions for retired government employees have been raised by 7%, and the budget for the Benazir Income Support Program increased to 716 billion rupees to help vulnerable families across the country.