As the world races toward renewable energy, Pakistan has taken a step back, taxing solar panels just when they became a lifeline for the middle class. In light of the global push for sustainable energy methods, Pakistan had initially proposed an 18% GST on imported solar panels in its 2024-2025 federal budgets. This sparked widespread public backlash due to both the timing and implications of the proposal. The timing of this proposal was particularly ill-suited, as the world was actively shifting towards more sustainable and clean energy-promoting methods.

Up till now, the imported solar panels had been either zero-rated or exempt from sales tax, mainly due to special SROs issued by the Federal Board of Revenue (FBR). These exemptions were introduced to encourage renewable energy use under Pakistan’s Alternative and Renewable Energy Policy, 2019. Further, the exemptions were also introduced to promote affordability, so that the middle class could easily install solar panels. Thus, if this proposal is allowed to come into action, then the entire purpose behind the sale-purchase of majority solar panels in Pakistan would seem to be adversely affected, as the public would then be forced to bear the burden of paying hefty electricity bills, once again. Pakistan has also committed to increasing its renewable energy share to 60% by 2030 under its Nationally Determined Contributions (NDCs) as part of the Paris Agreement. Introducing........

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