The GSM Association (GSMA) has urged the government of Pakistan to introduce targeted tax reforms and investment-friendly policies in the upcoming Finance Bill 2026-27 to support growth in the telecom and digital sectors.
In a letter addressed to Federal Minister for Finance and Revenue Muhammad Aurangzeb, the global telecom industry body appreciated recent reforms in Pakistan’s telecom policy framework, particularly changes related to spectrum pricing, phased payment mechanisms and moratorium facilities aimed at encouraging long-term investment.
The GSMA stated that recent policy measures have helped improve Pakistan’s digital connectivity landscape, including increased mobile internet adoption and reduction in the mobile usage gap. However, it warned that high taxation on telecom services and devices continues to remain a major obstacle to digital inclusion and sectoral investment.
The association emphasized that Pakistan’s telecom sector is currently subject to multiple federal and provincial taxes, including advance income tax on mobile usage, general sales tax on telecom services and customs duties on imported smartphones and telecom equipment.
According to industry estimates, mobile users in Pakistan pay up to 19.5 percent sales tax on telecom services in various provinces, in addition to withholding taxes deducted on mobile recharge and internet usage. Smartphone imports are also subject to customs duties, sales tax and regulatory duties, increasing the cost of digital access for consumers.
GSMA noted that high upfront and distortionary taxes discourage network expansion, delay next-generation infrastructure deployment and reduce affordability for low-income users.
The telecom body recommended three key tax measures for consideration in the Finance Bill 2026-27, including reduction in sector-specific taxes affecting telecom investment, lowering taxes and duties on smartphones and digital devices to improve affordability, and simplifying tax structures to ensure policy consistency and predictability for investors.
The association highlighted that countries adopting balanced telecom taxation policies generally experience higher levels of digital investment, faster rollout of 4G and 5G infrastructure and stronger economic growth.
GSMA further stated that Pakistan still faces a significant digital divide, particularly in rural and underserved areas, and stressed that affordable internet access and investment incentives are essential to expanding digital connectivity.
The organization concluded that a stable fiscal framework combined with ongoing spectrum reforms could create a positive cycle of investment, innovation and economic development within Pakistan’s digital economy.
The recommendations come ahead of the federal budget 2026-27, where the government is expected to announce new taxation and revenue measures under ongoing economic reform efforts.
