Telecom industry seeks tax relief and lower import duties to support 4G, 5G and broadband expansion
Pakistan’s telecom operators have proposed reducing advance income tax on telecom usage from 15% to 8% in the federal budget for 2026–27 as part of broader fiscal reforms aimed at accelerating digital connectivity and broadband expansion.
The Telecom Operators Association submitted a series of fiscal and regulatory recommendations for FY2026–27, seeking measures to improve affordability and support nationwide deployment of 4G and 5G services.
The industry body said high upfront taxation continued to limit digital adoption, particularly among low-income and prepaid mobile consumers.
Among its key proposals, the association recommended abolishing customs duties on 5G and fixed broadband equipment to facilitate faster rollout of next-generation networks and fibre infrastructure.
It also urged the government to reduce cumulative duties and taxes on optic fibre cable imports — currently estimated at around 67% — to a maximum of 5%.
Telecom operators further proposed cutting withholding tax on the sector from 6% to 4% and extending the carry-forward period for turnover tax adjustments from two years to five years.
Separately, the GSMA also called for targeted telecom tax reforms in the upcoming federal budget, saying a balanced fiscal framework could encourage investment and strengthen nationwide digital infrastructure.
In a letter addressed to Finance Minister Muhammad Aurangzeb, the GSMA welcomed recent reforms in Pakistan’s telecom sector, particularly changes in spectrum policy and auction frameworks.
The association said the reforms had improved investor confidence and aligned Pakistan’s digital policies with international practices.
GSMA noted that Pakistan had made progress in reducing the mobile internet usage gap and expanding digital adoption across the country.
It said continued policy stability and targeted tax relief could help telecom companies accelerate network deployment, improve service quality, and expand connectivity to underserved regions.
The organization identified three major areas for reform in the Finance Bill 2026–27: aligning sector taxation with investment objectives, improving affordability of mobile services and smartphones, and simplifying tax structures to reduce compliance burdens.
Industry experts say lower telecom taxes could boost smartphone penetration, digital payments, e-commerce activity and overall economic productivity.
