Power Division’s Update on Solar Power Tax in Pakistan

Recent reports about imposing taxes on solar panels, whether for residential or commercial use, surprised many. However, the government has now addressed these reports.

Amid conflicting reports, the Power Division has refuted claims of a fixed tax on solar power, labeling them as misleading.

The Power Division clarified that there hasn’t been an official proposal sent to the federal government suggesting a fixed tax on solar power. Currently, there’s a subsidy of Rs 1.90 per unit benefiting around 30 million disadvantaged consumers.

Continuing this subsidy might lead to an additional burden of at least Rs 3.35 per unit for these consumers. The Division stated that the increasing use of solar panels aims to promote alternative energy sources.

Additionally, the government is evaluating the system and considering changes to shield the poor from more financial strain.

Regarding solar tax in Pakistan, there were earlier reports that the power agency proposed a tax of Rs 2,000 per kilowatt for solar setups with a capacity of 12kw or above. If accepted, 12-kilowatt panels would pay Rs. 24,000 in tax as per the proposal.

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