ISLAMBABAD: The federal government is considering major tax relief measures for Pakistan’s telecom and broadband sector in the upcoming FY2026-27 budget to boost digital connectivity, expand broadband access, and prepare the country for future 5G services. Officials say the proposed reforms are part of the broader Digital Pakistan vision aimed at improving affordable internet access nationwide.
According to sources, the government is reviewing a proposal to reduce import duties and taxes on fiber optic cable from nearly 60 percent to around 5 percent. The move is expected to lower infrastructure costs for telecom companies and internet service providers, enabling faster expansion of Fiber-to-the-Site (FTTS) networks across Pakistan.
Officials believe that reducing taxes on telecom infrastructure will accelerate fiberisation, which is considered essential for the successful rollout of 5G technology in Pakistan. Telecom experts have repeatedly warned that without large-scale fiber optic expansion, the country may face difficulties in achieving high-speed and reliable 5G connectivity.
The government is also examining options to lower taxes on internet services to make broadband more affordable for consumers. Currently, internet users in Pakistan pay approximately 19.5 percent in provincial taxes along with a 12.5 percent federal withholding tax, significantly increasing internet costs for households and businesses.
Industry representatives have long argued that heavy taxation on internet services and telecom infrastructure has slowed digital growth, limited broadband expansion, and reduced internet accessibility, especially in rural and underserved regions.
Officials involved in the budget consultations said affordable broadband and strong digital infrastructure are critical for Pakistan’s economic growth, IT exports, freelancing industry, and digital transformation goals. The upcoming federal budget is expected to focus heavily on digital infrastructure development and preparations for future 5G spectrum auctions.
Wireless and Internet Service Providers Association of Pakistan Chairman Shahzad Arshad welcomed the proposed measures, describing them as a positive step for the telecom industry. He said reducing duties on fiber optic cables and lowering internet taxes would improve broadband affordability, attract investment, and strengthen Pakistan’s digital economy.
Telecom companies and internet service providers are hopeful that the proposed tax reforms in the FY27 budget will support nationwide connectivity, improve service quality, and accelerate Pakistan’s transition toward advanced digital infrastructure and 5G technology.
