Govt Agrees to Cut Solar Panel Tax Under IMF Pressure

The federal government has agreed to reduce the proposed sales tax on solar panel imports from 18 percent to 10 percent following negotiations with its coalition partners, sources told ProPakistani. Lawmakers had pushed for a complete exemption, demanding that the tax rate be brought down to zero. However, under the terms of Pakistan’s agreement with the International Monetary Fund (IMF), maintaining a 10 percent sales tax on items previously covered under a zero-rated regime is mandatory. While the coalition authorities’ demand for full exemption could not be met due to IMF commitments, the government has decided to significantly scale back the proposed 18 percent tax. An official announcement on the revised rate is expected later today. According to sources, the IMF agreement stipulates two key conditions: a 10 percent sales tax must be applied where a zero-rated regime previously existed, and where sales tax already exceeds 5 percent, it must be raised to 18 percent. Later, Deputy Prime Minister Ishaq Dar announced at the National Assembly that the government has decided to reduce the 18 percent sales tax on solar panels in the budget to 10 percent.