• Members of the parliamentary committees say that protectionists measure unnecessary as no one produces locally solar panels
• Omar Ayub insists on the tariff structure altered under pressure from the IMF
• Nafisa Shah Slams ‘Martial Style Martial Law’ FBR measures to apply the law
Islamabad: In a rare sample of unity, the parliamentary committees unanimously rejected the sales tax of 18 percent proposed on the imported solar panels and recommended to reduce the tax rates of the smallest cars to relieve the load of low -income groups.
The Permanent Committees of Finance and Income from the Senate and the National Assembly held parallel sessions in the Chamber of Parliament to carry out a clause review by clause of the Finance Law draft 2025-26.
Both panels, chaired by Senator Salem Mandviwalla and Mna Naveed Qamar, respectively, proposed amendments and rejected several measures directly.
The president of the Federal Income Board (FBR), Rashid Mahmood Langial, defended the sun tax, arguing that it would protect national manufacturers. However, legislators indicated that solar panels are not produced locally and question the need for early protectionist measures.
Qamar and other members warned that taxing solar imports would now limit access to affordable renewable energy and increase electricity costs. Mirza Ikhtiar Baig asked why the Government would like to deprive the public of the cheapest power solutions.
The members of the National Assembly Committee also claimed that before the budget, certain stakeholders had imported and thrown solar equipment in forecast of tax increase.
After the deliberations, the members of all the lines of the party agreed to discard the tax proposal, emphasizing that the solar panels remain vital to provide affordable electricity.
Pakistan is emerging rapidly as a key leader in the deployment of solar energy. The country has increased the generation of solar electricity by more than three times the global average so far this year, fed by an increase of more than five times in solar capacity imports since 2022, Reuters said, citing data from the group of Ember energy experts.
This combination of rapid capacity and generation increased the increase has driven the solar energy of the fifth largest electricity source in Pakistan in 2023 to the largest in 2025.
Until now, in 2025, solar energy has represented 25 percent of the electricity provided by Pakistan public services, which makes it one of the least 20 nations worldwide that has obtained a quarter or more of monthly electricity supplies of the solar farms.
Small cars, great tax
The Senate Committee also expressed a serious concern for the GST increase from 12pc to 18PC in small vehicles, including 850cc cars.
Mandviwalla called the 18PC sales tax in a vehicle of 3 million “unfair” rupees, a resonant feeling for several senators. Proposals were discussed to moderate the tax at 14PC or 15PC instead.
Senator Shibli Faraz criticized inequality, noting that while tax relief extends to certain regions, small car owners continue to face high taxes.
However, the Committee approved an exemption from sales tax on aircraft imports as part of PIA privatization.
The panels were informed about the changes proposed in the definition of fiscal fraud, which has now been divided into two categories. If a suspect presents a risk of escape, the authorities will proceed to arrest them.
In addition, the people involved in the manipulation of records or who do not respond to three official notices will also face detention.
The FBR will establish a Board of three members to review the cases before passing arrests.
No arrests will be made for fiscal fraud cases involving amounts below RS50 million.
‘IMF pressure’
During the session, MNA Omar Ayub commented that the tariff structure had been altered under IMF pressure.
On the issue of stopping the sale of illegal cigarettes, the FBR proposed to grant the agencies for the application of the District and the authority to act against perpetrators.
However, the members of the committee expressed concerns about potential corruption, arguing that delegating such powers could feed the bribe.
The president of FBR, Langial, insisted that powers of compliance with the police and local authorities should be given to effectively address tax evasion in the tobacco sector.
The members of the committee retreated, warning that such movement could open doors to extortion and suggest that the application remains only under the jurisdiction of FBR. In an acute replica, Mr. Langrial commented: “Are our officials somehow incorruptible?”
A heated exchange took place during the meeting between MNA Nafisa Shah and the FBB chief. Mrs. Shah criticized application measures, comparing them with “martial law style regulations”, stating that such actions cannot be justified under any circumstance.
Langial defended his position, declaring: “served to a democratic government.” He expressed disapproval for the comments of Mrs. Shah, noting that using the terms associated with martial law was inappropriate.
In response, Mrs. Shah insisted on her right to freedom of expression, emphasizing that, as a member of the National Assembly, she has the authority to express her opinions. “You can defend your institution, but we will exercise our right to express ourselves,” he said.
Although the Federal Government aims to impose sales tax on digital services, the provincial authorities have expressed reservations, citing its tax on the service of 15 pieces existing on such businesses. However, FBR officials argued that online sales taxes fall outside the provincial jurisdiction.
From next fiscal year, Iron scrap importers will be obliged to sell only to registered manufacturers. The authorities said that this measure aims to eliminate the misuse of “flying invoices” and commercial manipulation in junk trade.
Posted in Dawn, June 18, 2025
