Pakistan defies global trends: solar eclipse over a taxed nation

Pakistan is veering off the global path. Here’s a partial list of countries where their respective governments are incentivising installation of home solar systems through financial incentives and a whole host of schemes and policies: Afghanistan, Ethiopia, Ghana, Myanmar, Rwanda, Nepal, Bolivia, Zambia, Cameroon, Sudan, Senegal, Uzbekistan, Haiti, Nicaragua, Libya, Malawi, Botswana, Bhutan, Fiji, Panama, Azerbaijan, Armenia, Jordan, El Salvador, China, India, Bangladesh, Brazil, Mexico, Morocco, Columbia, Vietnam, Tunisia, Uruguay, Peru, Philippines, Argentina, Kenya, South Korea, Turkey, Chile, Egypt, Malaysia, Indonesia, Israel, Thailand, Australia, Japan, the UK, Canada, France, Spain, Italy, Sweden, Singapore, Ireland, Poland, Denmark and New Zealand. While the world embraces solar power with subsidies and innovation, Pakistan’s government disincentivises it.

Pakistan is veering off the global path. Here’s a partial list of countries where their respective governments are actively reducing taxes to stimulate economic growth, attract investment and ease citizen burdens: India, Malaysia, Singapore, Thailand, Argentina, the US, the UK, South Korea, Brazil, Poland, Ireland, Chile, Australia and Japan. In India, the personal income tax exemption limit rises from INR500,000 to INR700,000, benefiting 50 million taxpayers with INR40,000 crore in relief. In Brazil, the government has slashed tax on fuel and food from 25 per cent to 18 per cent, reducing living costs by BRL30 billion. The Thai government has halved the income tax for incomes below THB500,000, benefiting 15 million with THB50 billion in relief.

In 2018, Pakistan’s government collected a modest Rs76 billion from the hardworking salaried class. But last year? Brace yourself: Pakistan’s government pocketed a jaw-dropping Rs570 billion, a wallet-crushing leap that’s left salaried taxpayers reeling. Just a tax hike or a full-on financial ambush on Pakistan’s salaried class?

In Chile, the government slashes corporate tax for SMEs from 25 per cent to a lean 20 per cent, unleashing a wave of relief for small businesses. Meanwhile, Pakistan’s Federal Board of Revenue (FBR) clings to a punishing 29 per cent uniform corporate tax rate for all companies, SMEs included -- no mercy there. And for SMEs daring to earn over Rs500 million, a 10 per cent Super Tax kicks in, jacking the effective rate to a crushing 39 percent. What a stark contrast.

Governments around the globe have three things in mind: to ensure energy security, promote renewable energy and reduce carbon emission. What does the government of Pakistan have in mind? Why is the government of Pakistan going in the opposite direction? Governments around the world are reducing financial barriers to adopt solar power making it more accessible and attractive to residential users. Why is the government of Pakistan going in the opposite direction?

Why is Pakistan veering off the global path? From Afghanistan to New Zealand, governments are showering their citizens with solar incentives and tax relief. Why is the government of Pakistan taxing solar into retreat? Why is the government of Pakistan dimming the dream? The world is chasing energy security, renewables and lower emissions. What is the government of Pakistan chasing?