In a major budget announcement, Deputy Prime Minister and Foreign Minister Ishaq Dar said the government has revised key tax decisions after consulting coalition partners. Speaking in the National Assembly, he confirmed that the digital sales tax on services will remain under provincial control, as per the Constitution. This decision follows broad consultations, including talks with the Federal Board of Revenue (FBR).
Dar also addressed the hotly debated 18% General Sales Tax (GST) proposed on solar panels. He explained that nearly half of solar components were already taxed, while the new tax was set to cover the rest. However, after reviewing the matter, the government has now reduced the solar GST rate to 10%. He stressed that while generating revenue is essential, the government is open to reasonable relief measures when justified.
The Deputy PM noted that any tax relief must be balanced by changes elsewhere in the budget. For example, when the cabinet raised government employees’ salary increase from 6% to 10%, other adjustments were required to maintain the budget. “We believe in consensus and shared progress,” he said, highlighting the inclusive nature of the budget-making process.
He also shared updates on development projects, confirming that Rs 4.7 billion in funding for a new university in Sindh would remain intact under the Higher Education Commission’s development plan. In another change, the Pakistan Infrastructure Development Company Limited (PIDCL), initially created for Sindh, will now handle federal projects across all provinces. This move comes amid the closure of the Public Works Department (PWD).
Meanwhile, PPP MNA Syed Naveed Qamar thanked PM Shehbaz Sharif and Ishaq Dar for accepting PPP’s key budget proposals. He praised the tax cut on solar panels and supported PIDCL’s expanded role. Qamar said the government had addressed major concerns raised during the budget debate, calling it a win for cooperation and balanced policymaking.