Mian Zahid concerned over proposed 18pc tax on solar panels

KARACHI: The Chairman of National Business Group Pakistan, the President of the Pakistan Businessmen and Intellectuals Forum, the President of All Karachi Industrial Alliance, the Chairman of the FPCCI Advisory Board, Mian Zahid Hussain has expressed concern over the proposed 18% sales tax on solar panels in the upcoming federal budget.

He stated that this announcement has raised alarm among economic and energy experts as well as the general public. While the intention behind this measure is to protect local solar panel manufacturers, boost revenue, and control imports, it also poses a risk of dampening the rising public shift towards renewable energy.

He emphasized that in a country like Pakistan, where the energy crisis remains a chronic issue, encouraging solar technology is the only sustainable solution. Any step that discourages the use of alternative energy sources must be avoided, he said. He acknowledged that the state's financial needs are valid.

Still, he emphasized the importance of aligning fiscal decisions with public demand, environmental protection, and long-term strategic objectives. Imposing a tax on solar panels, he warned, will not only demotivate household consumers but also negatively impact small businesses that have adopted solar power as a means of shielding themselves against load shedding.

Mian Zahid said that this could lead to increased operational costs and reduced competitiveness in the market, and proposed that the government adopt a phased or targeted policy under which low-income consumers and rural areas receive special concessions, ensuring that the national drive toward energy self-sufficiency is not compromised. This could involve a gradual increase in the tax rate over a period of time, with exemptions for certain categories of consumers.

He added that while reducing reliance on imported solar equipment and encouraging domestic manufacturing is essential, which could lead to job creation and price stability, this transition will take time and cannot be rushed.

He pointed out that the global consensus recognizes the critical role of renewable energy in reducing carbon footprints and mitigating climate change. Therefore, damaging this sector in Pakistan would be an ill-advised move.

Mian Zahid further urged the government to reconsider its budgetary decisions and develop a policy that prioritizes public interest, environmental stability, and long-term energy availability, thereby giving current and future generations a reason to hope for a brighter future. He cautioned that failure to initiate stakeholder consultations immediately could erode the confidence of the solar industry and stall further investment.

Hence, he stressed that all stakeholders, including the government officials, policymakers, business community, and the general public, must be involved in the policy-making process to ensure a sustainable and widely acceptable solution.

Copyright Business Recorder, 2025