Karachi: The proposed 18% sales tax on solar panels in Pakistan's upcoming federal budget has sparked concern among business leaders and energy experts, raising questions about the country's commitment to promoting renewable energy. Mian Zahid Hussain, a prominent business leader and chairman of several national business forums, voiced these concerns on Monday, highlighting the potential negative impact on the growing shift towards sustainable energy.

Mian Zahid Hussain, who heads the National Business Group Pakistan and the Pakistan Businessmen and Intellectuals Forum, warned that while the initiative aims to protect local manufacturers and boost revenue, it risks discouraging the adoption of solar technology, a vital solution to Pakistan's enduring energy crisis.

He emphasized the importance of aligning fiscal decisions with public demand, environmental protection, and strategic objectives. The proposed tax, he argued, could deter household consumers and small businesses from adopting solar power, potentially increasing operational costs and reducing market competitiveness.

To mitigate these effects, Zahid Hussain proposed a phased or targeted tax policy that offers special concessions to low-income consumers and rural areas. He acknowledged the necessity of encouraging domestic manufacturing, which could lead to job creation and price stability, but cautioned that such a transition requires time.

Highlighting the global consensus on renewable energy's role in combating climate change, he urged the government to reconsider its budgetary decisions and prioritize environmental stability and long-term energy availability. He called for immediate stakeholder consultations to prevent eroding confidence in the solar industry and to encourage further investment.

The business leader stressed the importance of involving all stakeholders, including government officials, policymakers, and the public, in the policy-making process to ensure a sustainable and widely acceptable solution.