Some of the biggest measures in Pakistan’s upcoming budget may come through sector-specific tax changes affecting energy, transport and consumer costs.
According to the budget preview compiled by Topline Securities, the federal government may increase GST on solar panels from 10 percent to 18 percent, which could slow the shift from grid electricity to solar energy.
Meanwhile, higher solar costs may benefit power producers by reducing the pace at which consumers move away from the national grid.
In the auto sector, the government is also expected to increase GST on hybrid electric vehicles to standard rates.
Hybrid vehicles up to 1800cc may see GST rise from 8.5 percent to 18 percent, while larger vehicles could face an increase from 12.75 percent to 25 percent.
At the same time, the government is considering a New Energy Vehicle framework aimed at encouraging local assembly of green-energy vehicles.
The report also says the government may allocate Rs. 830 billion in power subsidies to manage circular debt and cover tariff differentials, including support for distribution companies and K-Electric.
These measures indicate that the budget will focus on balancing revenue generation with industrial policy, though with significant trade-offs for consumers.
While cleaner energy and transport remain policy priorities, they may become considerably more expensive under the new tax structure.
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Instead of encouraging solar energy, it is very odd that it is going to impose tax on it. The decision needs to be challenged in a court. Government has no right to tax a service derived from nature.
I am telling you the govt has become mad…they dont know the basics of Economics and the rules of business.
I have no words 😶
Government should remove all kind of taxes on Solar panels, Lithium batteries and inverters to encourage the people to shift to the clean energy but government chose to get benefits to the IPPs
its pretty clear these langoors have no idea what they are doing, the military just handed them the country to ruin.
😆 🤣 😂 😹
So govt priority is clean energy and better energy systems by increasing taxes on the clean energy itself.
So the richest get subsidies
While people and solar users get taxes
Let’s not forget last govt imposed same taxes before they were brought down.