The federal government has agreed to reduce the proposed sales tax on imported solar panels from 18 percent to 10 percent following negotiations with coalition partners, sources told Raised by Numbers.

While lawmakers had advocated for a complete exemption, seeking to eliminate the tax entirely, the government’s hands were tied by Pakistan’s commitments under the International Monetary Fund (IMF) agreement. The IMF mandates a minimum 10 percent sales tax on items that were previously zero-rated.

The decision to scale back the initially proposed 18 percent tax reflects a compromise between coalition demands and IMF conditions. An official announcement regarding the revised tax rate is expected later today.

Sources explained that the IMF agreement requires two key measures: applying a 10 percent sales tax where a zero-rated regime existed before, and increasing sales tax to 18 percent where it currently stands below 5 percent.