Experts call for special tax regime for Pakistan solar industry

Energy experts have said that the solar industry in Pakistan deserves a special and viable tax regime to enable it to unlock its true potential and to help the country in its drive to become self-reliant and independent in the energy sector.

This demand was made by the representatives of the solar industry who participated in the webinar organised by the Energy Update. The webinar was organised to discuss the issues of the taxation system and standardization of the products of the solar industry in Pakistan.

Participating in the online discussion, Chairman of PM’s Task Force on Housing, Zaigham Rizvi, said that much efforts had to be made to make the government and other stakeholders realize the potential of the solar industry to safeguard the environment in Pakistan.

He said besides safeguarding the environment, the solar industry would help the government to cut down its fuel import bill.

Rizvi lamented the situation that power plants were still being established in the country on the basis of imported coal when there was a huge potential to indigenously generate clean electricity using abundantly available solar energy.

He suggested that the solar industry should make efforts so that the international-level certification could be locally made available for authentication of its services.

Rizvi said the PM’s Housing Project could also utilise solar power to energize upcoming residential units in the country.

Chairman of Pakistan Solar Association (PSA), Muhammad Farhan, said that his association had done a lot of efforts to launch the system of net-metering to promote the use of solar power in the country.

He assured participants of the webinar that his association was always available to talk to any authority or official in the country to resolve the taxation issues of the solar industry.

M. Zakir Ali, CEO of Inverex, said that Pakistan’s solar industry surely had to expand and grow in next five to ten years as all the relevant stakeholders of the industry should remain united on a single platform to wage a joint struggle for the purpose.

He said the solar companies as being the EPC contractors had to pay much higher tax as compared to other sectors*.

Waseem Sheikh, CEO of IPS Solar, said the solar companies had to go through a much complex process to get registered with the Alternative Energy Development Board.

He said the taxation and regulatory regime for solar industry in Pakistan should be made as viable as was in the developed countries like Germany and Australia where the government’s policies helped a lot to utilize the maximum potential of renewable energy.

He said the end-users of electricity in Pakistan didn’t have much knowledge about the benefits of the solar industry.

Waqas Mughal, CEO of Renewable Power, complained that different provinces in the country had different taxation regimes for solar companies.

He disclosed to the participants of the webinar that there was no tax if someone imported solar cables but one had to pay the tax if the same product was purchased from the local market.

He said Pakistan had no clear-cut policy on the import of lithium-ion batteries that was otherwise widely used all over the world for better storage of wind and solar power.

Energy expert Irfan Ahmed said that Pakistan had the potential to generate two million megawatts of solar power but much less clean energy was being produced in the country.

He said that technological interventions like solar home systems and micro-grids could go a long way in promoting the use of solar power in the country.

He was of the view that the taxation issues of the industry would automatically end with indigenous production of solar equipment.

Saad Shaikh, Chairman of FPCCI’s Standing Committee on Energy, said that his committee would always be available to play a mediatory role between the government and the solar industry for the promotion of alternative energy in Pakistan.