The Pakistani government might include financial incentives for LED lights and solar panels in its annual federal budget 2016-2017, as the government aims to slash energy consumption while turning to alternative energy sources, according to a report by local media Business Recorder.

Globally, the LED lighting market is projected to grow 45% per year throughout to 2020, and LED lights produced is expected to reach $63.1 billion from the existing $13.6 billion, the report added.

Markets will move towards 100% replacing incandescent and traditional lights with LED bulbs, due to declining prices and increased interest from market channels to promote LEDs to consumers.

Moreover, LED light market in Pakistan soared. The country has imported more than US $100 million worth of LED lights during 2014-2015, and at least 100 million lights installed in the country will be eventually replaced by LED lights in the next five years. The replacements are to assist the country in slashing 1000 MW of energy consumption.

In the financial year of 2014-2015, more than US$ 100 million worth of LED lights were imported, and more than 100 million lights will need to be replaced in the country.

Replacing incandescent streetlights in Pakistan with LED streetlights would save at least 1,000 MW, estimated the report.

The tariff for imported LED lights in Pakistan is 20%, and 17% in Goods and Services Tax Bill (GST) while proposing certain LED imported products should be exempted from payment of duties and taxes under Fifth Schedule to the Customs Act 1969.

There are four local LED manufacturers that are making 5.5W to 500W LED streetlights, LED tube lights, LED downlights, LED panel lights, LED bulbs, LED X-ray illuminators, flood lights, and projection lights. Some manufacturers have installed a fully automated Siemens SMT or LED assembly line to make millions of LED light bulbs, downlights, and streetlights annually.

However, the report noted anomalies with reverse cascaded tariff structures, where raw materials have much higher taxation than finished products has halted industry growth. Custom duty of 20%, sales tax 17%, regulatory duty 15%, income tax 5.5%, that have to be addressed for advancing developments in the local industry.

To encourage the development of the local industry, it has been proposed to allow the following inputs under Fifth Schedule at 5% for local LED lighting manufacturing: aluminum housing/ shell for LED light fixture, metal clad printed circuit boards MCPCB for LED, LED chips of all wattage and powers (SMD, COB, 3528, 5050, 3014 and more), LED drivers of all wattages, lenses for LED lights, aluminum sheet for LED fixtures, and aluminum alloy and Teflon wire for power supply.