Khawaja Shahzeb Akram, the Senior Vice President (SVP) of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has called for the exemption of unfair sales tax imposition on solar power equipment.
He emphasized that this exemption should apply to consignments with Letters of Credit and Bills of Lading opened before January 15, 2022, to prevent traders and companies from facing unbearable financial losses and potential bankruptcy.
Akram highlighted the challenges faced by importers of solar devices, with a significant number of containers awaiting clearance and importers grappling with heavy demurrage charges. These concerns were discussed in a high-profile meeting of Solar Power Industry leaders convened at the FPCCI.
During the meeting, Muhammad Ali Mian emphasized the adverse impact of the automatic and immediate imposition of a 17% sales tax on solar energy devices following the announcement of the mini-budget. This imposition has led to containers of solar devices being stuck due to non-clearance, causing unfair discrepancies in the import process.
Representatives of the Pakistan Solar Association (PSA) echoed these concerns, noting that while Federal Minister for Finance & Revenue, Shaukat Tarin, announced the scrapping of the proposal to tax solar devices in his speech on the Supplementary Finance Bill 2021-22, the exemption was later revoked. Importers were surprised to find the imposition of sales tax communicated on January 17th, when submitting Import Goods Declarations on the FBR portal for customs clearance.
Akram emphasized the importance of promoting alternative and green energy sources, stressing that imposing sales tax on solar energy equipment in Pakistan is counterproductive and could have detrimental economic effects in the long term. He highlighted the increasing adoption of renewable energy sources like solar and wind power plants by residential and industrial consumers in Pakistan as vital alternatives to rising fuel prices and environmental degradation.
The business community, through Akram, called upon Prime Minister Imran Khan and Finance Minister Shaukat Tarin to reconsider the sales tax imposition on solar devices in the national interest. They urged for a review of the policy to support the wider adoption of solar power generation devices and equipment, aligning with global efforts to transition towards sustainable energy solutions.
As stakeholders await government action on this issue, the exemption of sales tax on solar power equipment remains a crucial matter for the advancement of renewable energy initiatives and the sustainability of Pakistan’s economy.
