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ISLAMABAD: Pakistan’s Deputy Prime Minister Ishaq Dar on Wednesday said the general sales tax (GST) on imported solar panels had been reduced from 18% to 10% for the current year, following concerns raised by a parliamentary finance body.

The Senate Standing Committee on Finance and Revenue had urged the government a day earlier to withdraw the proposed 18% GST on imported solar panels, noting that some stakeholders had begun stockpiling equipment ahead of the federal budget to avoid the new levy.

The country’s proposed federal budget for the 2025-26 fiscal year included an 18% GST on the import and local supply of solar panels and related equipment, prompting concern from industry stakeholders and clean energy advocates.

Pakistan imported 17 gigawatts (GW) of solar panels in 2024, twice the volume recorded the year before, to meet rising consumer demand, according to the Global Electricity Review 2025.

“The 18 percent on top of 46% was an additional burden,” Dar told the National Assembly.

“So, regarding this, after consultations and deliberations, we have decided that this year we will keep a 10% sales tax and not 18%.”

Dar highlighted how this was the most debated subject after the budget was announced.

He also explained that around 46% of components used in solar installations in Pakistan were imported while the remaining 54% including inverters and other equipment were locally sourced and already subject to standard taxation.

Solar energy has supplied 25% of Pakistan’s grid electricity so far this year, placing the country among fewer than 20 globally that generate at least a quarter of their monthly power from solar farms.

Industry stakeholders and clean energy activists had warned that the added cost in tax could slow the rapid adoption of rooftop solar systems by households and businesses, potentially undermining national targets for expanding the share of renewables in the country’s energy mix.

Pakistan increased its solar electricity generation at a rate more than three times the global average in 2025, driven by a surge in solar capacity imports that were over five times higher than in 2022, according to data from Ember, a UK-based energy think tank.

This rapid growth in both capacity and output has propelled solar energy from being the country’s fifth-largest power source in 2023 to the top spot in 2025.

ISLAMABAD: Two of Pakistan’s leading business groups and a company backed by the powerful military will bid for the country’s ailing national carrier, a divestment the government hopes will kickstart the privatizations of state-owned enterprises.

The sale of Pakistan International Airlines will be the first major privatization for around two decades, with the sale of loss-making state-owned enterprises a condition of last year’s $7 billion bailout by the International Monetary Fund.

The government tried unsuccessfully to last year offload a stake in PIA, which is a major burden on its budget, but the sale was aborted because of the poor state of the airline and the conditions attached to any purchase.

Expressions of interest are due by Thursday for an up to 100 percent stake in the airline, with industry insiders expecting more bidders to emerge. They say the deal has been sweetened with a tax incentive and bolstered by signs of a turnaround in PIA’s fortunes.

The Ministry of Privatization did not respond to a request for comment.

Among those planning bids are the Yunus Brothers Group, owners of the Lucky Cement and energy companies; and a consortium led by Arif Habib Limited that includes Fatima Fertilizer, Lake City, and The City School, sources within the companies said.

Fauji Fertilizer Company, which is part-owned by the military, said it will be making an expression of interest, in a notice to the Pakistan Stock Exchange. Fertilizer production is a lucrative sector in Pakistan.

A group of PIA employees has also come forward to bid.

“The employees will use their provident fund and pension, in addition to finding an investor to place a bid. We’re doing this to save jobs and turn around the company,” said Hidayatullah Khan, president of the airline’s Senior Staff Association.

The airline was restructured last year, offloading approximately 80 percent of its legacy debt to the government to make it more attractive to investors. But bidders remain concerned about overstaffing and the ability to fire employees.

Last year’s sale effort failed when the sole bid of $36 million fell far short of a $305 million floor price.

Interested parties walked away before bidding, partly because the government was not willing to give up 100 percent of the company, with bidders saying they did not want the government to remain involved.

Since then, PIA has posted its first operating profit in 21 years, driven by cost-cutting reforms, after making cumulative losses of $2.5 billion.

This success of the current process will depend on whether the government is willing to give up a 100 percent stake, industry insiders said.

They added that a government decision this month to remove the requirement of paying sales tax upfront on the lease of new aircraft, which had been an impediment, will make the deal more attractive.

PIA resumed flights to Europe in January after the European Union lifted a four-year safety ban. The airline has also approached UK authorities for permission to resume services to London and Manchester.

The restoration of international routes is vital to future growth opportunities and successful bidders are likely to bring in foreign airlines as operators.