Budget 2026-27: Major Tax Changes May Impact EV& Solar Prices
News Desk
Islamabad: Consumers may face higher prices for solar panels, electric vehicles and hybrid vehicles in the upcoming fiscal year as the government considers major tax increases under Budget 2026-27 in line with recommendations linked to the International Monetary Fund (IMF) programme.
According to sources, discussions are underway on multiple taxation proposals, including a significant increase in the general sales tax (GST) on environmentally friendly technologies and vehicles.
The IMF has reportedly opposed granting further tax exemptions and proposed raising the GST on electric vehicles from the current one percent to 18 percent. A similar proposal is under consideration to increase taxes on hybrid vehicles from 8 percent to 18 percent.
Sources said the government is also considering increasing the GST on solar panels from 10 percent to 18 percent, a move that could substantially raise the cost of solar energy systems across the country.
Read More: https://thepenpk.com/india-unveils-15-defence-budget-hike-after-last-years-conflict/
If approved, the proposed tax hikes are expected to affect prices of electric cars, motorcycles, rickshaws, buses, trucks and other e-vehicles. Proposals to increase taxes on electric pickups, tractors and double-cabin vehicles are also being reviewed.
The potential measures have raised concerns among consumers and industry stakeholders, particularly at a time when the country has been witnessing growing interest in renewable energy and fuel-efficient transport alternatives.
Meanwhile, the textile sector has urged the government to immediately release pending refunds worth Rs327 billion and reduce electricity, gas and taxation burdens on industries.
Industrial representatives have argued that lower utility costs and timely refunds are essential for boosting exports and supporting economic recovery.
Sources said the government is considering limited relief measures for exporters, which could provide benefits of up to Rs100 billion. However, chances of a major relief package for the export sector remain slim at this stage.
