ISLAMABAD: The GSM Association (GSMA), a global industry group representing mobile operators, has called on the Pakistani government to reduce the heavy tax burden on the telecom sector in the upcoming 2025-26 budget, warning that current rates are making mobile services unaffordable for many, especially low-income users.
In a letter addressed to Federal IT Minister Shaza Fatima Khawaja, Jeanette Whyte, GSMA’s Head of Public Policy and External Affairs for Asia Pacific, emphasized the need for a more balanced tax structure. Lowering taxes, she argued, would enhance affordability for consumers and enable mobile operators to invest more in expanding and upgrading their networks.
According to GSMA’s 2024 analysis of Pakistan’s mobile industry, operators are currently paying around 42% of their revenues in taxes and fees—18% of which stem from charges unique to the telecom sector. This rate far exceeds the average tax burden of 26% in South and Central Asia, and is notably higher than in other global regions.
GSMA, which brings together over 1,200 members of the global mobile ecosystem, noted that while Pakistan has made major strides in mobile connectivity—reaching 84% 4G coverage—adoption still lags significantly. Despite widespread access, only 24% of the population are unique mobile internet users, leaving 74% unconnected. Of these, 59% live in areas with coverage but are not using mobile internet, highlighting a substantial usage gap.
This underutilization has broader implications. Mobile technology has been instrumental in advancing financial inclusion, education, and digital business, contributing to national development. Yet the untapped potential of mobile connectivity represents a major missed economic opportunity.
Citing estimates from the International Telecommunication Union (ITU), the GSMA pointed out that a 10% increase in mobile broadband penetration can lead to a GDP per capita rise of up to 2.43%.
The GSMA warned that the current tax regime is undermining the telecom sector’s ability to deliver high-quality services, extend coverage to underserved areas, and invest in future-ready technologies. Easing this burden, they argued, is essential for unlocking the full economic and social potential of mobile connectivity in Pakistan.
