Solar panel, internet prices likely to rise in Pakistan

ISLAMABAD: The prices of solar panels and internet are expected to rise in the coming months in Pakistan as  the International Monetary Fund (IMF) are now seeking alternative tax increases to cover likely revenue shortfall.

Those reports indicated that these suggested “emergency tax measures” will be part of the IMF’s second review report, which is slated to be released following the approval by the third tranche of a $1 billion loan by the Executive Board.

These steps will be initiated if the revenue gap crosses a level during the first half of the fiscal year (July to December), or if the Ministry of Finance cannot cut spending.

Increase in Tax on Solar Panels

Among the significant proposals made by the Federal Board of Revenue (FBR) to the IMF is the increase in the rate of the Goods and Services Tax (GST) on the importation of solar panels from 10% to 18% from January 2026.

The same goes for the possible enhancement in withholding tax on internet services, from 15% to 18-20%.

Solar panels to be imported into Pakistan are estimated by the FBR to potentially produce between 25,000 MW and 30,000 MW of electricity in the near future.

Now, rooftop solar panels are producing approximately 6,000 MW of electricity and have the potential to double it.

Yet the government is wary of promoting the accelerated growth of solar power, as it lowers reliance on the national grid, which is already saddled with a capacity payment burden valued at Rs1.7 trillion for the fiscal year.