ISLAMABAD: Pakistan’s telecom sector has submitted major proposals for Budget 2026-27, demanding wide-ranging tax relief and policy reforms to encourage investment in digital infrastructure and improve internet connectivity across the country.
According to reports, telecom operators have urged the government to reduce withholding tax from 6 percent to 4 percent. Industry representatives believe the reduction would support growth in broadband and mobile services while attracting fresh local and foreign investment into Pakistan’s telecom sector.
The companies also proposed extending the turnover tax credit adjustment period from two years to five years. Telecom firms said the current timeframe creates financial pressure on operators, while a longer adjustment period would improve stability and help companies continue expanding their networks across urban and rural areas.
A major demand from the sector includes the removal of customs duties on 5G equipment and fibre optic cables. Telecom operators estimate that eliminating these duties could unlock nearly $12 billion in additional investment for Pakistan’s digital economy. Industry experts believe lower import costs for telecom equipment would speed up the rollout of 4G and 5G networks nationwide.
The telecom industry stressed that improved internet infrastructure is necessary for digital transformation, online education, e-commerce and technology-based businesses. Operators said better connectivity in remote areas would also promote digital inclusion and support economic growth.
Another important proposal focuses on reducing advance income tax on mobile users from 15 percent to 8 percent. Telecom companies argued that high taxes on mobile usage are making communication services expensive, particularly for low-income prepaid consumers who form the majority of mobile users in Pakistan.
The sector further requested the withdrawal of powers related to adjustments in advance tax estimates, claiming such mechanisms create uncertainty for businesses and discourage long-term planning.
Telecom operators warned that rising operational costs are slowing the expansion of digital services in Pakistan. They urged the government to prioritise policies supporting investment in 4G and 5G technology under Budget 2026-27.
Industry data shows the telecom sector has invested over $6.3 billion during the past six years while contributing more than Rs1.9 trillion to the national exchequer, underlining its key role in Pakistan’s economy and digital future.
