Some of the biggest measures in Pakistan’s upcoming budget may come through sector-specific tax changes affecting energy, transport and consumer costs.
According to the budget preview compiled by Topline Securities, the federal government may increase GST on solar panels from 10 percent to 18 percent, which could slow the shift from grid electricity to solar energy.
Meanwhile, higher solar costs may benefit power producers by reducing the pace at which consumers move away from the national grid.
In the auto sector, the government is also expected to increase GST on hybrid electric vehicles to standard rates.
Hybrid vehicles up to 1800cc may see GST rise from 8.5 percent to 18 percent, while larger vehicles could face an increase from 12.75 percent to 25 percent.
At the same time, the government is considering a New Energy Vehicle framework aimed at encouraging local assembly of green-energy vehicles.
The report also says the government may allocate Rs. 830 billion in power subsidies to manage circular debt and cover tariff differentials, including support for distribution companies and K-Electric.
These measures indicate that the budget will focus on balancing revenue generation with industrial policy, though with significant trade-offs for consumers.
While cleaner energy and transport remain policy priorities, they may become considerably more expensive under the new tax structure.
