Pakistan, June 21 -- The federal government has decided to reduce the sales tax on imported solar panel parts from 18% to 10%, said Finance Minister Mohammad Aurangzeb during a Senate session. He explained that the earlier 18% tax was introduced to support local solar industry growth and create a fair competitive environment.

After extensive consultations and suggestions from members of both parliamentary houses, the government showed flexibility and lowered the tax rate. This new 10% sales tax will apply only to 46% of imported solar parts, while solar panel plates will be taxed at a much lower rate of 4.6%.

The Finance Minister also warned against hoarding and profiteering related to solar equipment, which has been reported even befor...