Budget 2025-26: PPP rejects tax on solar panels

ISLAMABAD: Sindh Energy Minister Syed Nasir Hussain Shah Nasir Shah on Wednesday rejected the proposal to impose taxes on solar panel in the federal budget 2025-26.

Speaking during ARY News programme ‘Off The Record’, the Sindh energy minister said that the imposition of tax on solar panel will adversely affect the poor.

The government has proposed an 18% sales tax on imported solar panels as part of the 2025-26 budget, aiming to support local manufacturers and reduce reliance on imports.

The budget proposal has initiated debate over its potential impact on prices of solar panels and the overall renewable energy market.

Syed Nasir Hussain Shah said that the widespread backlash will pose significant difficulties for the government. He pointed out that the ongoing International Monetary Fund (IMF) programme will further complicate matters for the administration.

The Sindh energy minister also expressed concern over the neglect of the Karachi to Sukkur motorway, describing it as a crucial project that has received inadequate attention.

He said that the federal government has proposed allocation of insufficient funds for the vital project. He also accused the government of ‘long-standing injustice’ toward Sindh.

In the budget 2025-26, vew taxation measures include a 5 percent income tax on annual pensions exceeding one crore rupees. The tax on cash withdrawals by non-filers has been increased from 0.6 percent to 1 percent.

Moreover, the government has decided to end the distinction between filers and non-filers. Only individuals who submit a wealth statement will be allowed to carry out financial transactions, and non-filers will no longer be permitted to purchase property or vehicles.

An 18 percent sales tax will now be imposed on the import of solar panels to promote local manufacturing.

Revised income tax slabs for salaried individuals

The government has claimed to provide significant relief to the salaried class in Budget 2025–26. All income tax slabs have been revised downward. For annual incomes between Rs 600,000 and Rs 1.2 million, the tax rate has been cut from 5 percent to 2.5 percent.

For a salary of Rs 1.2 million per year, tax liability has been reduced from Rs 30,000 to Rs 6,000. Those earning up to Rs 2.2 million annually will now pay 11 percent instead of 15 percent.

For incomes between Rs 2.2 million and Rs 3.2 million, the tax rate has been lowered from 25 percent to 23 percent. Other income brackets include a 1 percent tax on Rs 1.2 million annually, 12.5 percent on Rs 1.83 lakh per month, 22.5 percent on Rs 2.67 lakh, and 27.5 percent on Rs 3.33 lakh per month.