In a major policy shift outlined in the Federal Budget 2025–26, the government of Pakistan has proposed an 18% sales tax on imported solar panels. The move is aimed at supporting the domestic solar panel manufacturing industry and promoting local production of renewable energy equipment.
According to official budget documents, the objective is to create a level playing field for Pakistani manufacturers, who have long struggled to compete with cheap imported solar panels flooding the market.
Government representatives explained that small and medium-sized local manufacturers have faced mounting challenges due to low-cost imports, which has slowed the growth of domestic production and renewable energy initiatives. The tax aims to provide a protective cushion for the local industry, encouraging businesses to scale up and innovate.
This policy is also expected to:
- Encourage investment in local solar manufacturing
- Create employment opportunities
- Reduce Pakistan’s reliance on imports for energy-related technology
While the move may lead to a short-term price hike in imported solar products, the long-term goal is to strengthen Pakistan’s renewable energy sector and make the country more self-sufficient in clean energy technologies.
More clarity will emerge as the budget is debated and passed in Parliament
Engineer Nazim is the CEO and author at Khita.com.pk, combining an engineering background with a passion for writing to deliver practical, insightful, and well-researched content. He leads the platform with a mission to inform, educate, and empower readers across Pakistan and beyond.
