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Govt to impose 5% tax on Solar Panels by September

Govt to impose 5% tax on Solar Panels by September

ISLAMABAD: The federal government has been planning to impose 5% tax on import of solar panels and related equipment by September this year.

However, Parliamentary Secretary for Finance, Revenue, Economic Affairs, and Statistics & Privatization Rana Muhammad Afzal Khan said that government has not yet imposed any tax on solar panels import but it is expected after completion of assessment by economic experts.

Responding to a calling attention notice submitted by opposition members of the National Assembly, he said that government planned to impose five percent tax on import and manufactured items related to solar panels by September or October after making full assessments in this regard.

He briefed the House that solar panels and related equipment were exempted from sales tax as per two SROs No 551 and 555, however, the government, as per its policy, withdrew the said SROs and decided to impose tax on its import.
He said that a solar panel had warranty of some 15 to 20 years, but importers of solar panels were not providing any guarantee to the consumers, therefore, some local companies had started manufacturing of solar panels to provide standardized items to the consumers and government ought to protect the manufacturers.

Earlier, PPP MNAs Imran Zafar Leghari and Ijaz Jakherani while voicing against imposition of tax on solar panels demanded of the government to exempt the said items from tax and customs duty to overcome the prevailing energy crisis.
They highlighted that government had imposed 32% tax on the import of solar panels and related equipment.

The FBR has also clarified that the customs duty and sales tax would be charged at statutory rate on the import of some specific parts of solar panel which are identifiable as being manufactured locally in view of the request of the indigenous engineering industry.