ISLAMABAD: Finance Minister Muhammad Aurangzeb told the Senate session that the federal government has decided to reduce the sales tax on imported solar panel parts from 18% to 10%.
He explained that the earlier 18% tax was introduced to promote the local solar industry and create a fair competitive environment.
After extensive consultations and suggestions from members of both houses of parliament, the government showed flexibility and reduced the tax rate. This new 10% sales tax will be applicable only on 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 cut came into effect. He assured that strict legal action will be taken against those trying to take advantage of the situation.
Aurangzeb highlighted the government’s achievements in controlling inflation, improving the current account balance and increasing foreign exchange reserves without presenting a mini-budget last year. He said these measures are aimed at stabilizing Pakistan’s economy and encouraging sustainable growth.
In addition, the government has relaxed income tax rates for low- and middle-income earners. Tax on those earning between Rs 600,000 and Rs 1.2 million per year has been reduced from 2.5% to 1%. Pensions for retired government employees have been increased by 7%, and the budget for the Benazir Income Support Program has been increased to Rs 716 billion to support vulnerable families across the country.
