IMF Agrees to Withdraw Proposed Tax Hike on Solar Panels and Stationery Ahead of Budget 2026-27

In a major development ahead of the Federal Budget 2026-27, the International Monetary Fund (IMF) has reportedly agreed to withdraw the proposed tax hike on solar panels and stationery items. The decision comes after discussions with the government and is being seen as a relief for consumers, students, and the renewable energy sector.

According to official sources, the government successfully convinced the IMF not to proceed with the proposed increase in sales tax on solar panels. Earlier plans suggested raising the tax from 10% to 18%, but this proposal has now been dropped. As a result, the existing 10% tax rate is likely to remain unchanged in the upcoming budget.

IMF Agrees to Withdraw Proposed Tax Hike on Solar Panels and Stationery Ahead of Budget 2026-27

This move will support Pakistan’s growing solar energy market. In recent years, many households and businesses have shifted toward solar power due to rising electricity costs. Keeping taxes stable will encourage further adoption of renewable energy systems.

In another relief measure, the IMF has also reportedly agreed to withdraw the proposed 18% sales tax on stationery items. This decision will benefit students, parents, and educational institutions across the country, where the cost of basic school supplies has already been a concern due to inflation.

Along with these changes, sources indicate that there may be no significant adjustments in taxation on stock market transactions and tobacco products. However, discussions regarding the real estate sector are still ongoing, and no final decision has been reached yet.

Negotiations between the government and the IMF are continuing on multiple proposals as part of the broader budget planning process. Both sides are working to balance fiscal stability with public relief measures ahead of the new financial year.

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The government will also introduce a relief package worth approximately Rs60 billion for salaried individuals. Under this proposal, the taxable income threshold may be increased from Rs4.1 million to Rs7 million. It wil reduce the tax burden on middle-income earners.

Additionally, the current 10% surcharge on higher-income individuals is likely to be removed. However, the existing tax slabs for employees earning between Rs600,000 and Rs1.2 million annually are expected to remain unchanged.

Officials are also considering measures to support exports. One proposal under review is the possible removal of the 1% export tax. It could help improve competitiveness for exporters in international markets.

Overall, the upcoming budget discussions suggest a focus on providing targeted relief while maintaining fiscal discipline. While some proposals are still under negotiation, the withdrawal of tax hikes on solar panels and stationery items is being viewed as a positive step for both households and key economic sectors.

If you interested to know the current rates of solar panels in Pakistan, you can check our detailed article on it.

See Also: Solar Panel Price in Pakistan Today – Updated Rates, City-Wise Prices and Buyer Guide (2026)