KARACHI: The Federal Board of Revenue (FBR) is evaluating major changes in its tax policy ahead of the 2025-26 budget, including the potential withdrawal of sales tax exemptions on imported solar panels and other sectors. The move is part of broader reforms aimed at expanding the tax net and increasing government revenue.
This direction was confirmed by FBR Chairman Rashid Mahmood Langrial during a Senate Standing Committee on Finance meeting held at the Parliament House on Thursday. Responding to lawmakers’ concerns, Langrial stated that many current exemptions no longer yield significant benefits and are now being reassessed.
One of the key sectors under review is the renewable energy industry, particularly solar panels. Imports of solar technology currently enjoy tax exemptions, but the FBR is weighing the fiscal impact of continuing such policies amid rising import bills and stagnant tax growth.
At a parallel session of the National Assembly’s finance committee, representatives from oil refineries raised concerns over what they described as an uneven tax structure. While input materials are taxed, their final products remain exempt from General Sales Tax (GST), a situation they claim has discouraged investment projects worth $6 billion. Chairman Langrial acknowledged the inconsistency, noting that such operations are effectively outside the Value Added Tax (VAT) regime. He said that imposing GST on refinery outputs is under serious consideration.
Meanwhile, a separate issue was raised by MNA Mirza Ikhtiar Baig regarding the reported recovery of over Rs 80 million from KababJee restaurant in Karachi. Baig criticized the FBR for acting without due process, which he said left the business owner in a state of financial and emotional distress. The FBR chairman responded that he was unaware of the matter but promised a full investigation.
During the same session, lawmakers reviewed the Income Tax (Second Amendment) Bill, 2025. Concerns were voiced about a clause that could restrict tax relief beyond the 2025 tax year. Revenue officials assured that the language of the bill would be reexamined and revised accordingly.
These developments signal a determined shift in Pakistan’s fiscal strategy, with the FBR aiming to tighten sector-specific tax breaks and align with long-term revenue goals.
