FPCCI demands tax exemption on solar equipment

January 29, 2022: Khawaja Shahzeb Akram, SVP FPCCI, has demanded that the unfair and burgeoning sales tax imposition on solar power equipment should be exempted for the consignments whose Letters of Credit and Bills of Lading have been opened before January 15, 2022; else, traders and companies will suffer unbearable financial losses and bankruptcy.

A huge number of solar devices import’ containers are awaiting clearance; and, importers are facing heavy demurrage charges, he added.

A high-profile meeting of the Solar Power Industry leaders took place at FPCCI to discuss the issue at length. Khawaja Shahzeb Akram, SVP FPPCI, shared his deep concerns with the Pakistan Solar Association (PSA)’ delegation in the presence of Mr Irfan Iqbal Sheikh. 

Mr Muhammad Ali Mian said that since the announcement of the mini-budget, the automatic and immediate imposition of sales tax has caused the containers of solar devices to be stuck due to non-clearance as a result of unfair discrepancies. He added that imposing a 17% tax on solar energy devices is totally irrational and illogical; and would, in fact, harm the objectives of transitioning to alternative and renewable energy policy. 

Representatives of the PSA said that Mr Shaukat Tarin, Federal Minister for Finance & Revenue, in his speech on Supplementary Finance Bill 2021-22 announced that the proposal to tax solar devices has been scrapped. But, on January 17th, while submitting the Import Goods Declarations on the FBR portal for customs clearance, it was communicated by various importers that the sales tax exemption has been abolished and the tax on solar devices has been imposed. 

Khawaja Shahzeb Akram added that, at a time, when alternative and green energy sources are being aggressively promoted all over the world, it was not wise to impose sales tax on solar energy equipment in Pakistan; which will have deadly economic effects in the long-term as well.  He further said that, at present, as the only alternative to the rising prices of petrol, electricity and gas; and, ever-increasing climatic deterioration and pollution, renewable energy sources like solar and wind power plants are being installed by the residential and industrial consumers of Pakistan.

The business community unanimously urges Prime Minister Imran Khan and Finance Minister Shaukat Tarin to reduce sales tax on solar devices in the wider national interest of the state and its economy; and, the sales tax imposition on the Solar Power Generation Devices and Equipment should be reviewed at the earliest, he added.

Press Release