The Federal Board of Revenue (FBR) is considering the imposition of additional taxes on solar panels, despite a global decline in their prices. The Pakistan Alternative Energy Association (PAEA) has leveled accusations against the FBR, claiming that the regulator is pressuring solar panel importers to maintain higher prices.
In a strongly-worded letter addressed to the Chairman of FBR, Tariq Khattak, the Executive Director of PAEA, highlighted the incongruity between the decreasing international prices of solar panels and the FBR’s insistence on illogically increasing domestic rates. Importers are reportedly facing challenges in handling the import and clearance of solar panels due to this conflicting approach.
Khattak pointed out that the FBR’s prescribed unit prices of $0.14/W and $0.16/W significantly surpass the current global export prices for these modules on a Cost and Freight (CFR) basis. This stark difference has not gone unnoticed by the State Bank of Pakistan (SBP), which is now scrutinizing the FBR’s minimum threshold, considering the notable disparities in pricing declared on invoices.
Transactions displaying a substantial variance between the declared unit prices and the FBR’s circular guidelines are now being treated as red flag indications by the SBP, leading to non-entertainment of such transactions. The letter emphasized that the FBR’s guidelines do not align with the reality on the ground, particularly in the case of Chinese solar panels, which are priced considerably lower.
As global demand for solar panels plummets, the FBR’s imposition of what the PAEA deems as unreasonably high taxes is exacerbating the challenges faced by solar panel importers. The letter asserted that this incorrect valuation by the FBR is a significant hindrance to the import of solar panels, aggravating the ongoing energy crisis in the country.
The PAEA has called for the immediate withdrawal of the Specific Regulatory Order (SRO) on solar panels, urging the government to permit large-scale imports at reduced rates. The letter argued that such a move would not only facilitate widespread adoption of solar panels in domestic, industrial, and commercial applications but also contribute to addressing the energy crisis that the country is currently grappling with.
