Islamabad: In a major setback to the government’s tax reform drive, the National Assembly Finance Committee and the Senate Standing Committee on Finance have rejected key proposals to impose new taxes on solar panels and e-commerce, both part of the government’s efforts to meet International Monetary Fund (IMF)-backed fiscal targets.
The NA finance committee on Tuesday unanimously rejected the proposed 18% sales tax on solar panels, which the Federal Board of Revenue (FBR) estimated would have generated Rs20 billion in revenue. The proposal, introduced as part of the 2025–26 federal budget, was met with bipartisan resistance.
“Solar is not a luxury, it’s a necessity,” said committee chair MNA Syed Naveed Qamar. “We won’t allow taxation that discourages clean energy.” Other lawmakers echoed the sentiment, urging the government to find alternate revenue sources. MNA Shahida Akhtar Ali suggested taxing sugary drinks instead of clean energy solutions.
Finance Minister Muhammad Aurangzeb defended the proposal, stressing the limited fiscal space and the government’s plan to phase out all sector-specific subsidies. FBR Chairman Rashid Langrial also justified the tax by citing over-invoicing and underutilization of imported solar equipment—nearly 13,000 MW out of 32,000 MW brought in over five years reportedly remains unused.
Meanwhile, the Senate committee on Wednesday rejected a proposed tax on domestic e-commerce transactions but approved a new tax on the profits of elite private clubs, including Islamabad Club. FBR Chairman Langrial called out such institutions as “luxury spaces for a privileged few,” claiming they hold billions in untaxed reserves.
While lawmakers pushed back against taxing solar and e-commerce, the government is continuing with other measures. A 2% sales tax on e-commerce transactions has already been introduced, and courier companies will now be responsible for collecting tax at source. Additionally, new taxes on global digital platforms like Google and YouTube have been proposed to raise Rs65 billion in the upcoming fiscal year. The rejection of these key proposals highlights growing political resistance to austerity measures tied to Pakistan’s $7 billion IMF loan programme, especially where public utility and digital access are concerned.
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