Solar Panels Tax Reduced to 10pc from 18pc by Federal Govt of Pakistan

ISLAMABAD: Deputy Prime Minister and Foreign Minister Ishaq Dar announced that the digital sales tax on services will remain under the control of provincial governments. He also shared that the proposed general sales tax (GST) on solar panels has been reduced from 18 percent to 10 percent. Check Tax on Solar Panels Increased to 18% in Budget 2025.

Speaking in the National Assembly on Wednesday, Dar explained that after thorough discussions with government partners and other stakeholders, an agreement was reached on several important budget matters.

He said that, according to the new agreement, only provinces have the right to apply a digital sales tax on services. Concerns about this digital tax were discussed in detail with all parties involved, including the Federal Board of Revenue (FBR). Dar promised that the issue would be addressed clearly in the finance minister’s final speech on the budget.

Earlier, there was a suggestion to charge an 18 percent GST on solar panels, which led to many debates. Dar said that 54 percent of the parts used in solar panel systems are already taxed, and the 18 percent GST would only apply to the other 46 percent. However, after consulting with all stakeholders, the government decided to lower the GST on solar panels from 18 percent to 10 percent.

Dar explained that these tax decisions are important for raising government funds, and providing relief in one area means adjustments must be made in others. He noted that when the cabinet increased the salary rise for government employees from 6 percent to 10 percent, the budget had to be adjusted accordingly. He stressed the need for all parties to work together.

Another key decision was to continue funding new universities in Sindh through the Public Sector Development Programme (PSDP), with Rs4.7 billion to be released by the Higher Education Commission (HEC).

Dar also acknowledged concerns about closing the Public Works Department (PWD). He confirmed that the Pakistan Infrastructure Development Company Limited (PIDCL) will now manage all federal development projects across the provinces, not just in Sindh.

He assured the National Assembly that the government is ready to address real concerns through dialogue and cooperation.

PPP leader Syed Naveed Qamar thanked the Prime Minister and Deputy Prime Minister for considering the proposals from his party and the Sindh government. He said they wanted to remove the 18 percent tax on solar panels completely, but it was not possible for now. After the budget is approved, a committee will be formed to discuss reducing the solar panel tax further. Qamar also welcomed the decision to expand PIDCL’s mandate to all provinces.

Aijaz Hussain Jakhrani spoke about the steps taken by the Sindh government to improve Karachi’s development and health services. He also called for the removal of the FBR’s power to arrest people and requested focus on the Sukkur-Hyderabad Motorway, which is very important for the local people.

Earlier, members from both the government and opposition asked for Special Agriculture Zones, IT Centres in different areas, more support for farmers, and funding for religious sites like churches and temples to promote growth and inclusion.

Dr. Zulfikar Ali Bhatti from PML-N emphasized the need to develop rural areas and the agricultural sector. He suggested building Special Agriculture Zones nationwide with all necessary facilities to increase farm output. He also called for IT centers and skills training programs for young people in rural areas.

Fatehullah Khan from PPP condemned Israeli attacks on Iran and asked the government to help flood victims in his area.

Awais Haider Jhakar from the Sunni Ittehad Council criticized government policies that have hurt farmers and reduced agricultural production.

Sanjay Parwani from MQM criticized the lack of government funding for churches and temples in the federal budget for 2025-26.

Abdul Ghafoor Haideri from JUI-F asked the Deputy Speaker to demand strict action against those involved in the attempted kidnapping of Maulana Fazlur Rehman’s son.

PPP’s Zulfiqar Ali Behan called for an agricultural emergency and asked for the removal of taxes on fertilizers to help increase farm production.

Chaudhry Mubeen Arif Jatt from SIC requested the government to immediately withdraw the proposed 18 percent GST on solar panels and highlighted the financial difficulties faced by farmers.

Chaudhry Riazul Haq from PML-N asked for a review of FBR’s powers and lower prices for fertilizers.

Sohail Sultan said that the government should help people by increasing workers’ wages and including more youth programs in the budget.

Parliamentary Secretary Sajid Mehdi praised the armed forces for their good performance against Indian aggression. He also said that Pakistan needs to improve its agriculture sector and called for making pesticides and fertilizers tax-free.

Many other lawmakers also took part in the budget debate, raising various points and suggestions.