Govt Cuts Solar Panel GST to 10% After Public Outcry

Deputy Prime Minister Ishaq Dar has announced a key revision to the government’s tax policy on solar energy equipment. In response to public backlash and consultations with stakeholders, the government has reduced the General Sales Tax (GST) on solar panels from the previously proposed 18% to 10%.

Speaking at a press briefing, Dar noted that 54% of solar-related components were already under taxation. The initial plan was to expand this tax to the remaining 46%, but growing concern from environmental groups, consumers, and industry leaders prompted a reconsideration. The revised 10% GST aims to encourage the adoption of renewable energy while minimizing financial pressure on households and businesses.

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Dar emphasized that this tax relief aligns with the government’s goal to make clean energy accessible to more people across Pakistan. “We want to strike a balance between our revenue requirements and the urgent need to promote solar energy,” he said.

He also clarified that taxation on digital services remains under the jurisdiction of provincial governments, as mandated by the Constitution. The federal government, he confirmed, will not interfere in provincial rights concerning digital sales tax.

This policy shift reflects the government’s responsiveness to public feedback and commitment to both economic and environmental sustainability.