Import of solar panels, other items: govt urged to restore tax exemptions

KARACHI: The federal government has removed tax exemptions on the import of solar panels and its products in the Finance (Supplementary) Act that will discourage the government’s efforts of promotion of renewable energy.

In a joint press conference at Karachi Press Club on Tuesday, representatives of Pakistan Solar Association (PSA) and Karachi Electronic Dealers Association (KEDA) urged the federal government to restore the tax exemption on the import of solar panels and other allied product as the country is already facing a severe energy crisis and there is need to promote the renewable energy resources.

On the occasion, Naveed Karar Vice Chairman Pakistan Solar Association (PSA), Muhammad Zakir Ali member Executive Committee PSA, Muhammad Rizwan Irfan President and Saleem Memon Senior Vice President Karachi Electronic Dealers Association were present.

They said that the imposition of 17 percent sales tax on the import of solar panels and allied products will definitely discourage the government’s efforts toward renewable energy. They said that on 13th January, the Minister for Finance and Revenue, Shaukat Tarin, during his speech on the Finance (Supplementary) Bill, 2022 had announced that no tax has been imposed on the solar sector.

However, on 17th January, while importers of solar panels submitted import GDs on the Federal Board of Revenue (FBR) Portal for customs clearance, it was revealed that the Sales Tax exemption has been eliminated, and tax will be imposed on solar equipment, he added.

The imposition of tax will result in a significant increase in the prices of solar panels and related equipment, taking it beyond the reach of the common man, they mentioned.

“Solar and wind power plants are the only alternative solutions in the recent scenario, in which the prices of electricity, gas and petrol are rising. The solar panels are also environmentally friendly,” Saleem Memon said.

He said that the residential and industrial consumers in Pakistan are installing these plants on their own initiative, resulting in not only a reduction in environmental pollution, but also making a significant contribution in reducing Pakistan’s import bill of oil.

The installation of a Solar System is a one-time investment which provides continuous benefits for more than 25 Years without any additional expenses, compared to generators and fossil fuel-based power plants that require costly diesel and oil to be imported every month, Rizwan said.

On behalf of Pakistan Solar Association, representatives have appealed to President Arif Alvi, Prime Minister Imran Khan, Minister for Finance and Revenue Shaukat Tarin, Minister of Energy Power Division Hammad Azhar and other officials to reconsider the decision to levy Sales Tax on solar panels and related equipment.

“In the long-term and wider interest of the country and the people of Pakistan, it is hereby urged to resume the tax exemption on import of solar panels to provide relief to the whole community for the betterment of the renewable energy sector in the country,” they said.

Copyright Business Recorder, 2022