Budget 2025-26: Will the solar panels become expensive?

ISLAMABAD: With the budget 2025-26 just around the corner, speculations is on rise will the solar panels become more expensive.

According to official sources, the IMF’s latest recommendations call for abolishing  all tax exemptions, including those currently granted to solar energy equipment

This move would potentially raise the cost of solar panel imports, installations, hence making them more expensive for consumers

Industry experts warn this step could deal a blow to Pakistan’s slow but growing shift toward renewable energy. Solar panels have gained popularity in recent years due to chronic load-shedding and soaring electricity bills.

Budget 2025-26: Luxury tax, agri levies under review to meet IMF targets

Removing tax relief in the budget 2025-26 could push the prices of solar panels beyond the reach of average consumers, just as more middle-income households were beginning to consider the switch.

The IMF also called for criminal action against tax evaders and proposed a major hike in penalties for point-of-sale (POS) violations, raising the fine from Rs 5 lakh to Rs 5 million.

According to sources, IMF has also recommended imposing an 18 per cent General Sales Tax (GST) on fertilisers, pesticides, and agricultural machinery besides also increasing the sales tax on luxury items beyond the existing 25 per cent.

The IMF also wants to enhance the use of technology to detect tax fraud and expanding the powers of tax officials with more transparency

These proposals are part of ongoing discussions between Pakistan and the IMF as the country prepares to announce its upcoming federal budget on June 10.