ISLAMABAD: Solar panel prices in Pakistan are expected to rise significantly in the next fiscal year as the government considers increasing taxes on renewable energy equipment under proposed budget measures.
According to sources, the International Monetary Fund (IMF) has expressed concerns over various tax exemptions currently available in different sectors and has urged Pakistan to phase them out. Solar panels, electric vehicles (EVs), and hybrid vehicles have reportedly been categorized as products primarily benefiting higher-income consumers.
Sources indicate that the government is considering raising the sales tax on solar panels from 10 percent to 18 percent in the upcoming federal budget. If approved, the move would increase the overall cost of installing solar energy systems, making them less affordable for ordinary consumers.
Government officials say the proposals are being discussed as Pakistan negotiates a new long-term bailout program with the IMF. As part of these negotiations, authorities are exploring measures to broaden the tax base and reduce tax concessions and exemptions.
Energy experts warn that the proposed tax increase could slow the adoption of renewable energy across the country. They argue that higher costs may discourage households and businesses from investing in solar power, potentially affecting Pakistan’s transition toward cleaner and more sustainable energy sources.
The government has not yet made a final decision, and the proposed measures are expected to be debated before the budget is formally presented.
