Islamabad, May 7, 2025: In a compelling pre-budget appeal, the Global System for Mobile Communications Association (GSMA) has called on the Pakistani government to slash excessive mobile service taxes—currently the highest in the region.
Citing rising concerns over affordability and dwindling investment, GSMA warns that without urgent reforms, Pakistan’s digital growth may be at risk.
According to GSMA’s findings, mobile users in Pakistan pay a staggering 33% combined tax on mobile recharges—broken down as 18% in sales tax and 15% in advance income tax.
This figure places Pakistan at the top among nine regional and economic peer countries, overshadowing mobile tax rates in Nepal (26%), Sri Lanka (23%), India (18%), the Philippines (12%), Indonesia (11%), Singapore (9%), Thailand (7%), and Malaysia (6%).
“This level of taxation is unsustainable,” GSMA emphasized, noting that mobile taxation in Pakistan not only discourages consumer access but also throttles investment in telecom infrastructure.
To reverse this trend, GSMA recommends trimming the advance tax on mobile recharges to 12.5% and reducing the sales tax to 16%.
Additionally, it proposes eliminating import duties on mobile devices, which would make smartphones more affordable and encourage digital inclusion.
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The association also highlighted how telecom operators are bearing the brunt of heavy taxes. Among its key proposals:
- Slash the advance income tax on telecom companies from 5.5% to 1%
- Eliminate the 4% minimum turnover tax on the sector
- Exempt license and spectrum renewal fees from advance tax
- Remove the 75% advance tax imposed on non-filers in the sector
GSMA further urged that the telecom industry be granted withholding tax exemptions, similar to those already enjoyed by Pakistan’s banking and oil sectors.
With the digital economy poised to play a transformative role in Pakistan’s future, rethinking the current tax regime on mobile services is not just advisable—it’s essential.
Policymakers must act swiftly to make mobile access more affordable and attract greater investment in connectivity.
Should Pakistan reduce its mobile taxes to boost connectivity and innovation? Join the conversation and share your thoughts!
