Telcos Welcome New Budget But Ask Govt to Cut Mobile Taxes

The Telecom Operators’ Association (TOA) has welcomed several digital-economy measures announced in the Federal Budget 2026-27 but has urged the government to cut advance and withholding taxes on mobile services

The association has also asked to lower duties on optical fiber infrastructure and introduce additional reforms to accelerate digital adoption and investment across Pakistan.

The industry body said these measures would make telecom services more affordable for consumers, support broadband expansion, encourage investment in digital infrastructure, and strengthen Pakistan’s broader digital transformation agenda.

In a statement issued on Monday, TOA acknowledged the government’s efforts to maintain macroeconomic stability while supporting long-term economic development. The association said the budget reflects continued recognition of the importance of digital connectivity and the digital economy.

TOA welcomed the government’s proposal to reduce customs duties on raw materials used in the local manufacturing of mobile handsets, subject to approval through the Finance Bill. According to the association, the move could improve smartphone affordability and help expand digital connectivity across the country.

The association also praised the rationalization of the super tax, saying it would strengthen the investment climate and support growth within Pakistan’s digital economy.

However, it called for the rationalization of advance and withholding taxes imposed on telecom services and mobile users, arguing that the current tax structure places a burden on consumers.

The association noted that while Pakistan has around 206 million mobile subscribers, only 7.7 million people are active taxpayers, leaving most users with no practical way to recover taxes deducted from their mobile usage.

TOA also urged policymakers to consider reducing duties on optical fiber infrastructure, describing fiber networks as critical for broadband expansion, faster internet deployment, and meeting future connectivity requirements.

The association called for reforms aimed at improving tax certainty, reducing administrative discretion, and further enhancing the ease of doing business to attract greater private-sector investment.

It stressed that mobile connectivity serves as a foundation for Pakistan’s digital economy, supporting sectors including financial services, education, healthcare, e-commerce, agriculture, manufacturing, and public service delivery.

TOA Secretary General Kamal Ahmed said policies that improve affordability, encourage investment, and accelerate infrastructure deployment generate economic benefits well beyond the telecom sector by boosting productivity, innovation, financial inclusion, and overall economic growth.

Separately, the association welcomed the government’s recent decision to make Right of Way (RoW) for telecom infrastructure free of charge. TOA said the measure addresses a longstanding industry concern and is expected to reduce network deployment costs, accelerate broadband expansion, and improve connectivity for businesses and consumers nationwide.