Pakistan’s solar industry urged the government to drop a proposed 18 per cent general sales tax (GST) on imported solar panels, warning the move could stall the country’s shift to renewable energy and increase costs for households and businesses.
The Pakistan Solar Association (PSA) said in a submission to the Ministry of Power that the tax, outlined in the federal budget for the 2025–26 fiscal year, would raise the upfront cost of solar systems and make them less accessible, especially for small users already hit by high electricity prices.
“This tax risks discouraging solar adoption at a time when countries around the world are accelerating their shift to renewables,” PSA Chairman Waqas Moosa said in a statement.
The group said the proposed tax could reverse years of progress in expanding access to clean and affordable energy, which has played a key role in reducing dependence on fossil fuels and improving energy security.
The government has argued that the GST would support local manufacturing, but the PSA said Pakistan lacks large-scale or high-efficiency panel production capacity. Most domestic units produce low-wattage panels that do not match imported options, it added.
Instead of imposing new taxes, the PSA called for incentives to develop local production, including phased support for solar assembly, research and development funding, and GST exemptions for households and small-scale users.
The association warned that higher costs could drive consumers back to conventional energy sources, further straining the country’s foreign reserves due to fossil fuel imports.
It said it remained open to working with the government on a long-term strategy to promote clean energy and strengthen domestic capacity.
