Pakistan’s telecom industry has submitted major proposals for the Budget 2026-27, urging the government to reduce taxes and provide policy incentives aimed at accelerating digital growth and improving nationwide connectivity.
According to reports, telecom operators believe the proposed measures could attract billions of dollars in investment while helping expand broadband and next-generation mobile networks across Pakistan.
The recommendations come at a time when the telecom sector is facing rising operational costs, increasing infrastructure expenses, and growing demand for faster internet services.
Proposal to Reduce Mobile Phone Taxes
One of the key demands from telecom companies is the reduction of withholding tax from 6 percent to 4 percent. Industry stakeholders argue that lowering the tax burden would encourage investment in digital infrastructure and support long-term sector growth.
Telecom operators also proposed reducing advance income tax on mobile users from 15 percent to 8 percent. They stated that high mobile taxation directly affects millions of prepaid consumers, especially low-income users who rely heavily on affordable mobile connectivity.
The sector believes lower taxes on mobile services would help improve digital accessibility and increase smartphone and internet adoption across the country.
Removal of Duties on 5G Equipment
Another major recommendation focuses on removing customs duties on 5G equipment and fibre optic cables. Telecom companies estimate that eliminating these duties could unlock nearly $12 billion in additional investment for Pakistan’s digital economy.
Industry experts say reduced equipment costs would speed up the rollout of 4G and 5G networks while improving internet services in underserved and rural regions.
The telecom sector stressed that affordable infrastructure development is essential for expanding high-speed internet access and strengthening Pakistan’s digital transformation goals.
Telecom Industry Seeks Longer Tax Adjustment Window
Operators have also requested the government to extend the turnover tax credit adjustment period from two years to five years. According to industry representatives, a longer adjustment period would provide financial stability and allow companies to continue investing in network expansion projects.
Additionally, telecom firms called for the withdrawal of powers related to adjustments in advance tax estimates, claiming such mechanisms create uncertainty for businesses operating in the sector.
Telecom Industry Highlights Economic Contribution
Telecom companies emphasized their importance to Pakistan’s economy, revealing that the sector has invested more than $6.3 billion over the last six years.
They also stated that the industry contributed over Rs1.9 trillion to the national exchequer, underlining the telecom sector’s role in supporting digital connectivity, economic activity, and technological advancement in Pakistan.
