Pakistan’s telecom industry has urged the federal government to abolish customs duties on 5G devices and telecom equipment while also demanding significant reductions in taxes on mobile recharge services in the upcoming Budget 2026-27. The recommendations were submitted as part of broader proposals aimed at accelerating Pakistan’s digital transformation and 5G expansion.
According to industry representatives, the current taxation system is creating major financial pressure on telecom operators and consumers alike. Telecom companies have proposed reducing advance income tax on telecom services under Section 236 from 15 percent to 8 percent to make mobile services more affordable for users, especially low-income and prepaid customers.
The telecom sector also requested the complete removal of customs duties on imported 5G and fixed-line telecom equipment, including smartphones, network infrastructure, servers, batteries, SIM cards, and related components. Operators argue that high import taxes are significantly increasing deployment costs and slowing down the rollout of next-generation technologies across Pakistan.
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Industry officials estimate that rationalizing duties on telecom infrastructure could unlock nearly Rs. 12 billion in additional investment for network expansion and digital infrastructure development. The proposals also include reducing taxes on optic fiber cable imports from around 67 percent to just 5 percent to support broadband growth and nationwide connectivity improvements.
The recommendations come as Pakistan prepares for wider commercial 5G adoption following recent spectrum developments. Telecom regulators and industry stakeholders have repeatedly highlighted that high taxes on smartphones remain one of the biggest barriers to digital inclusion and 5G adoption in the country.
Earlier this year, parliamentary committees also discussed reducing PTA taxes on imported smartphones to encourage greater use of 5G-compatible devices. Officials revealed that imported premium smartphones currently face tax rates exceeding 50 percent, making many devices unaffordable for average consumers.
The telecom industry believes that reducing taxes and duties would not only improve internet penetration and smartphone adoption but also support digital banking, e-commerce, online education, and Pakistan’s broader digital economy ambitions.
