Government slashes tax burden on solar equipment imports to one percent

The government has taken an initiative to increase solar power generation to address the country's existing energy crisis. As part of this, the import of solar power-related equipment has been exempted from all other tax burdens except a 1 percent import duty.

The matter was confirmed through a notification issued by the National Board of Revenue (NBR) on Wednesday night, September 16. The notification also stated that the facility will remain in effect for six months from the date of issuance. The same benefit will also apply to commercial importers.

Earlier, in the budget for the 2026-27 fiscal year, various solar power equipment were exempted from customs duty, regulatory duty and advance tax to encourage the renewable and sustainable energy sector. However, even after those exemptions, the total tax burden stood at 17 percent, including 15 percent value-added tax (VAT) and 2 percent advance income tax. With the government's new notification, that tax burden has now been reduced to just 1 percent.

The NBR said this tax exemption will significantly reduce the cost of implementing solar power projects and rapidly increase new power generation capacity. At the same time, this step will play an effective role in reducing dependence on fossil fuels and further strengthening the country's overall energy security and sustainable economic development.