Islamabad: The Private Power & Infrastructure Board (PPIB) has urged the Federal Board of Revenue (FBR) to amend the Sales Tax Act, 1990, and the Income Tax Ordinance, 2001, to facilitate the swift development of solar PV projects by Arab countries, according to informed sources speaking to Business Recorder.
The PPIB emphasizes that aligning with the government’s energy security, affordable electricity, environmental protection, and sustainable development goals, there’s a strategic shift towards fast-tracking solar power projects. This shift aims to reduce reliance on costly imported fossil fuels for power generation.
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By embracing solar power at a rapid pace, Pakistan anticipates not only saving on foreign reserves spent on importing expensive fuels but also ensuring affordable electricity for consumers, ultimately paving the way for a sustainable power sector.
Security concerns have been raised by a Saudi firm, citing difficulties in finalizing agreements for solar projects.
To support these initiatives, the Federal Cabinet approved the Framework Guidelines for Fast-Track Solar PV Initiatives in October 2022. Under this framework, large-scale solar PV projects will be developed via competitive bidding or government-to-government (G2G) arrangements. Notably, there’s keen interest from Saudi Arabia, the UAE, and Kuwait in partnering with Pakistan under the G2G mode for renewable energy projects.
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The government is actively facilitating solar PV project development under this framework, offering fiscal incentives such as exemptions on import duties for project-related equipment and materials, as well as a reduced income tax rate of 15% for project profits.
