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Companies Demand Removal of Sales Tax on Electric Cars and Solar Panels

The Government of Pakistan wants to introduce electric vehicles (EVs) in Pakistan but popular opinion denotes that the policies and infrastructure are not designed to enable this transition.

The renewable energy stakeholders recently echoed these concerns and asked the government to abolish the General Sales Tax (GST) on EVs and solar panels. They also requested the International Monetary Fund (IMF) to formulate progressive financing solutions for Pakistan’s EV and renewable energy sectors.

The Alliance for Climate Justice and Clean Energy presented these demands in a letter to the IMF board prior to its review meeting today. The letter criticized the imposition of GST on EVs and solar panels, implying that it will not allow for the fulfillment of the government’s vision.

A spokesperson for the alliance told the media that the government is aware of the importance of the normalization of EVs but the taxes have still been increased to create a roadblock in the industry’s path to expansion.

Furthermore, the implementation of 20 percent GST on solar panels will dissuade the adoption of EVs by the public. Resultantly, the already-towering oil import bill will continue to rise and the notion of a clean and green Pakistan will remain a pipe dream.

Government’s Stance

The government may not revoke the taxes on EVs and solar panels as it aims to discourage imports as much as possible.

The Adviser to Prime Minister on Commerce, Abdul Razak Dawood, told the media that the government seeks to enforce a ‘Made in Pakistan’ culture to mitigate economic outflows and increase the quality of indigenized products to create more employment opportunities and add value to the economy.

He stated that the government’s vision is to create a self-sustainable economy, and will incentivize all those who aid its fulfillment.