Web Desk: The International Monetary Fund (IMF) has agreed to drop a proposed increase in taxes on solar panel products, following discussions with the Pakistani government, sources familiar with the matter said.
The development comes as Islamabad finalises its federal budget for the 2026–27 fiscal year.
Prime Minister Shehbaz Sharif personally engaged in efforts to persuade the IMF to reconsider higher taxation on solar equipment and stationery items. As a result, the Fund has shown flexibility and agreed not to proceed with the proposed hike.
The decision is being viewed by government officials as a significant breakthrough aimed at safeguarding public interests during a period of economic adjustment.
Pakistan has seen a sharp rise in solar adoption in recent years as households and businesses seek alternatives amid high electricity costs and power shortages. Industry representatives had warned that additional taxation could slow the country’s transition toward renewable energy.
Meanwhile, talks between the government and the IMF remain ongoing over proposed tax concessions for the real estate sector.
Discussions are focused on balancing revenue generation targets with incentives designed to stimulate economic activity. No final agreement has yet been announced regarding the property sector measures.
The federal budget for 2026–27 is expected to outline broader fiscal reforms as Pakistan continues to work under its IMF-supported economic program.
