Islamabad 1 , August: In a major crackdown on financial malpractice in the renewable energy sector, the Federal Board of Revenue (FBR) has imposed a massive fine of Rs111 billion on several solar panel import companies accused of money laundering and over-invoicing.
According to FBR officials, an intensive investigation revealed that the firms manipulated invoices to inflate the value of imported solar equipment, allowing them to illegally siphon off large sums of money abroad under the guise of legitimate trade. This practice, the FBR says, not only violated customs regulations but also posed serious risks to the national economy and foreign exchange reserves.
An official statement from the tax authority emphasized that the crackdown is part of a broader effort to curb trade-based money laundering, particularly in sectors benefiting from tax exemptions or government incentives.
“We support solar energy as a sustainable solution for Pakistan, but we cannot allow it to become a front for financial crimes,” said an FBR spokesperson. “We have a responsibility to ensure that tax exemptions are not exploited for illicit gains.”
While the FBR has not publicly disclosed the names of all the implicated companies, sources close to the investigation confirm that at least a dozen firms are under scrutiny. Some are believed to have grossly overstated their import costs — in some cases by more than 300 percent — enabling them to launder untaxed income under the radar.
Industry insiders warn that this action could temporarily disrupt the solar equipment supply chain, as several of the penalized firms were among the country’s leading importers. However, the government maintains that compliance and accountability must come first.
“We support green energy, but we must also uphold financial integrity,” said Minister for Climate and Energy Transition, Dr. Zara Malik. “Clean energy cannot be built on dirty money.”
The investigation is expected to expand, with the FBR collaborating with the Federal Investigation Agency (FIA) and the State Bank of Pakistan (SBP) to trace the flow of funds and identify any offshore links.
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If the allegations are proven in court, the firms could face criminal prosecution, asset seizure, and blacklisting from future trade privileges.
Background:
Pakistan’s solar industry has seen rapid growth in recent years, bolstered by tax incentives and rising electricity costs. However, watchdogs have long warned of regulatory loopholes that could be exploited for financial crimes, especially in import-heavy sectors.
The FBR’s move marks one of the largest penalties ever imposed on the renewable energy sector in Pakistan.
