ISLAMABAD: The federal government of Pakistan has finalized a draft of the “Solar Panel Local Manufacturing and Allied Equipment” policy for a period of 10 years, aiming to provide incentives to manufacturers and reduce dependency on imported finished goods, according to well-informed sources.
The Special Investment Facilitation Council (SIFC), in its 5th Apex Committee meeting held on September 8th-9th, 2023, directed the formulation of the “Solar Panel Local Manufacturing Policy” through consultations in Working Group (WG) meetings. Following several WG meetings and consultations with stakeholders, the “Solar Panel and Allied Equipment Manufacturing Policy 2024” has been developed.
The draft policy, now formulated, proposes exemptions of tariffs and taxes on raw materials and machinery used in local manufacturing of solar panels and allied equipment. Additionally, it aims to increase tariffs on imports of finished solar panels and allied equipment to discourage dependency on imports.
The policy also includes a long-term plan spanning 10 years, with targets for investment, production capacity, exports, and localization. Potential investors will be required to submit a bank guarantee equal to the amount of tariff and tax exemptions.
The roadmap outlined in the proposed Policy includes provisions for capacity enhancement, export-sales ratio, and localization targets over the 10-year period. The government plans to impose tariffs on imports of finished goods, with the tariff rate increasing over the years.
Exemptions provided in the Policy will be subject to the achievement of targets for localization and exports. In case of non-achievement of targets, incentives will be withdrawn and recovered.
The proposed incentives will be extended through the Fifth Schedule of the Customs Act, 1969, to manufacturer firms recommended by the Engineering Development Board (EDB) based on evaluation of their business plans.
As comments from stakeholders are received, the summary will be placed before the Economic Coordination Committee (ECC).
