The Telecom Operators Association has issued a formal response to the Federal Budget 2026-27, welcoming several digital economy measures while simultaneously urging the government to go further on mobile service taxation, optical fibre infrastructure duties, and the administrative reforms needed to improve the investment climate for Pakistan’s telecommunications sector.
The association acknowledged the government’s efforts to maintain macroeconomic stability while supporting long-term economic development, and welcomed the proposed reduction in customs duties on raw materials used in local mobile handset manufacturing, describing the move as a step that could improve smartphone affordability and help expand digital connectivity. The rationalisation of the super tax, which has been reduced from 10 percent to 8 percent for companies above Rs 500 million in income and abolished entirely for those below that threshold, was also praised by the association as a measure that would strengthen the investment climate and support growth within Pakistan’s digital economy. The government’s decision to make Right of Way for telecom infrastructure free of charge was similarly welcomed, with the association describing it as addressing a longstanding industry concern that is expected to reduce network deployment costs and accelerate broadband expansion nationwide.
However, the Telecom Operators Association was clear that the budget left significant unfinished business on the mobile tax front. Despite sustained public advocacy from Federal Minister Shaza Fatima Khawaja, no reduction was made to the advance and withholding taxes imposed on telecom services and mobile users, a structure that the association says places a disproportionate burden on consumers, particularly given the disconnect between the size of Pakistan’s subscriber base and its active taxpayer base. With around 206 million mobile subscribers but only 7.7 million active taxpayers, the overwhelming majority of mobile users have no mechanism to recover the taxes deducted from their mobile usage, meaning the cost falls entirely on the consumer with no offsetting benefit. The association also called on policymakers to reduce duties on optical fibre infrastructure, describing fibre networks as critical for broadband expansion, faster internet deployment, and meeting future connectivity requirements that the 5G rollout will make increasingly urgent.
Telecom Operators Association Secretary General Kamal Ahmed stated that policies which 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. The industry body also 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 into Pakistan’s digital infrastructure. The association’s position reflects a recurring tension in Pakistan’s technology policy: the government’s stated commitment to digital connectivity and a knowledge-based economy sits uneasily alongside a tax structure that continues to treat mobile services as a convenient revenue extraction mechanism rather than an essential utility to be made as accessible as possible.
Follow the SPIN IDG WhatsApp Channel for updates across the Smart Pakistan Insights Network covering all of Pakistan’s technology ecosystem.
