Islamabad (HRNW)- The federal government has proposed increasing the General Sales Tax (GST) on solar panels from 10 percent to 18 percent and raising the GST on electric and hybrid vehicles to 18 percent in the federal budget for the fiscal year 2026-27, a move that could significantly increase prices for consumers.
According to sources, the proposed tax changes are likely to make solar panels, electric vehicles and hybrid vehicles more expensive across Pakistan.
Sources said that the International Monetary Fund (IMF) is opposing broad tax exemptions and has advised the government that any relief provided to a sector should be offset through alternative revenue measures.
The IMF has reportedly proposed increasing the GST on electric vehicles from 1 percent to 18 percent, while the tax rate on hybrid vehicles could rise from 8 percent to 18 percent.
Under the proposed budget measures, the GST on solar panels may also increase from 10 percent to 18 percent, which could lead to higher prices for electric cars, motorcycles, rickshaws, trucks, buses and other eco-friendly transport options.
In addition, proposals are under consideration to raise taxes on electric pickups, tractors and double-cabin vehicles.
Meanwhile, representatives of the textile industry have urged the government to release pending refunds worth Rs327 billion and have called for reductions in taxes, electricity tariffs and gas prices.
Industrialists argue that such relief measures would help boost exports, although sources indicate that the possibility of a major relief package for the export sector remains limited despite discussions on providing support worth up to Rs100 billion.
The proposed tax measures are expected to be closely watched by consumers, businesses and investors ahead of the presentation of the federal budget.
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