Image: Nengyuanjie
The Pakistani government has proposed an 18% General Sales Tax (GST) on imported solar panels in its budget proposal for the fiscal year 2025-2026, which was submitted to the National Assembly for review on June 9. Finance Minister Muhammad Aurangzeb stated that the move aims to promote the development of domestic photovoltaic manufacturing.
The Pakistan Solar Association (PSA) has strongly opposed the proposal, arguing that the tax will hinder the progress of solar energy deployment. PSA Chairman Waqas Moosa said, "In the context of the global acceleration toward clean energy, this tax will undermine our climate goals." The association pointed out that Pakistan lacks efficient large-scale manufacturing capabilities, and the tax will not effectively protect local industries.
Data shows that Pakistan's net-metered solar installed capacity has grown rapidly, increasing from 1.3 GW in the fiscal year 2023 to 4.9 GW by March 2025. This growth has primarily relied on imported components, with 13 GW of photovoltaic modules imported from China alone in the first half of 2024.
Renewable energy analysts have noted that the rapid expansion of solar power has raised concerns about power market balance. Syed Faizan Ali Shah, a member of the Prime Minister’s Solar Committee, previously stated that under the existing long-term power purchase agreement framework, uncontrolled solar expansion could strain the power system.
