According to Pakistani media reports, Pakistan's Finance Minister Muhammad Aurangzeb recently announced during his budget speech that the government, led by Prime Minister Shehbaz Sharif, plans to impose an 18% General Sales Tax (GST) on imported solar panels and photovoltaic (PV) cells in the 2025-2026 fiscal year.
The Pakistani government expects to generate approximately 20 billion rupees (around 500 million RMB) in tax revenue through this measure in the next fiscal year. At the same time, following the implementation of this tax policy, solar imports are projected to exceed 110 billion rupees (approximately 2.8 billion RMB) during the same period.
The report states that although Pakistan’s solar energy industry is concerned that the new tax may slow down the adoption of solar power, the government remains determined to push forward with the plan.
Muhammad Aurangzeb stated that the move is aimed at supporting local manufacturers and correcting market imbalances.
Rashid Langrial, Chairman of the Federal Board of Revenue (FBR), further explained that domestically assembled solar panels have already been subject to the same tax burden, while imported panels were previously exempt, putting local manufacturers at a disadvantage in the market. The new import tax policy is expected to create a level playing field for the domestic industry.
This tax measure also aligns with Pakistan’s broader fiscal objectives under the guidance of the International Monetary Fund (IMF), which include broadening the tax base and reducing energy sector subsidies. Although the government sees the value-added tax as a key source of revenue during a period of fiscal tightening, industry experts have warned that it could hinder new investments in solar infrastructure, particularly affecting small-scale consumers.
However, policymakers believe that demand for solar power remains strong, as it serves as an effective hedge against energy inflation. They argue that even with rising costs, import volumes will remain high.
It is worth noting that Pakistan’s photovoltaic (PV) industry has seen rapid growth in recent years, with continuous increases in solar imports. China has been the primary source of these PV products.
Between 2020 and 2024, Pakistan imported approximately 27 gigawatts of PV modules in total, the majority of which came from China. In 2024 alone, Pakistan imported around 16 to 17 gigawatts of PV modules, with about 12.5 gigawatts sourced from China.
Source：https://mp.weixin.qq.com/s/k6MgAVIp9DzMPiozcYG5bg
