GSMA urges Pakistan to cut telecom taxes to enhance affordability and sector growth

The GSM Association (GSMA), a global organization representing mobile operators, has urged the Pakistani government to reduce taxes and fees in the telecom sector in the upcoming budget for 2025-26. 

According to media reports, in a letter to Federal IT Minister Shaza Fatima Khawaja, Jeanette Whyte, Head of Public Policy and External Affairs for Asia Pacific at GSMA, emphasized that lowering sector-specific taxes would make mobile services more affordable, particularly for low-income consumers.

The association pointed out that a more balanced tax structure would not only ease the financial burden on consumers but also enable telecom operators to invest in expanding networks and upgrading to next-generation technologies. 

According to GSMA’s analysis of 2024 data, the mobile sector in Pakistan paid approximately 42% of its revenue in taxes and fees, with 18% stemming from sector-specific charges that apply only to the mobile industry. This tax burden is significantly higher than the South and Central Asia average of 26%, and surpasses tax levels seen in other regions.

GSMA, a network of over 1,200 members in the mobile ecosystem, works to promote innovations that foster business growth and societal progress. 

Over the past decade, Pakistan’s mobile sector has grown substantially, with 4G coverage now reaching around 84% of the population. Despite these advancements, mobile service adoption remains low, with a 59% usage gap, the second-highest in South Asia.

Only 24% of Pakistan’s unique subscribers use mobile internet, leaving a large portion of the population disconnected, including 59% who have access but do not utilize mobile internet. This gap is seen as a missed economic opportunity. According to the International Telecommunication Union (ITU), a 10% increase in mobile broadband penetration could potentially raise GDP per capita by as much as 2.43%.

The GSMA emphasized that this gap not only limits the potential for economic growth but also affects the mobile network operators’ ability to generate revenue, sustain quality services, expand coverage, and invest in future technologies.