PVTIME – Pakistan’s finance minister has announced a 18% goods and services tax (GST) on imported solar panels and photovoltaic (PV) cells for the 2025–26 fiscal year. This move is intended to support local manufacturers and expand the tax base. This policy, which was announced in the budget speech, is expected to generate ₨20 billion (₹500 million) in revenue, as solar imports are projected to exceed ₨110 billion (₹2.8 billion) next year.
According to the government, the tax will address market disparities, as local assembled panels already face equivalent taxation, whereas imports were previously exempt. The aim is to create a level playing field for domestic producers, in line with IMF-backed fiscal reforms designed to reduce energy subsidies and strengthen public finances.
While the solar industry warns that the levy could deter small consumers, who are price sensitive and may hesitate due to higher equipment costs, policymakers stress that solar demand will remain robust. They highlight its role as a hedge against energy inflation, citing recent import data: Between 2020 and 2024, Pakistan imported around 27 GW of solar modules, with 12.5 GW being sourced from China in 2024 alone.
The measure reflects a strategic shift towards balancing import dependency with industrial self-sufficiency. Although local production currently cannot meet the surge in demand, the tax is intended to stimulate domestic manufacturing, create jobs, and ensure long-term energy security.
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