Pakistan’s telecom sector is under pressure due to a significant tax burden, impacting its ability to expand and enhance digital infrastructure. A recent report in Business Recorder raised concerns about the alignment of current taxation policies with Pakistan’s goals of fostering a competitive and inclusive digital economy. Over the past decade, the sector has contributed more than PKR 2.5 trillion in taxes and levies, supporting financial inclusion, e-commerce, digital governance, and IT exports.
Operators in Pakistan contribute between 35% and over 40% of their revenues annually through taxes, levies, and regulatory payments, as per Pakistan Telecommunication Authority (PTA) data. The sector faces challenges in meeting continuous investment requirements for network expansion and upgrades, leading to a strain between fiscal contributions and capital expenditure needs. Mobile users in Pakistan bear a tax burden of around 33–35% on prepaid services, making telecom one of the most heavily taxed consumer sectors, impacting affordability and access, especially for low-income users.
Despite mobile broadband coverage reaching around 81%, nearly 40% of users in Pakistan are not actively using mobile internet services. The sector is moving into a capital-intensive phase, with recent spectrum auctions necessitating commitments exceeding $500 million, in addition to investments in 5G rollout and annual reinvestment of 15–20% of revenues. The average revenue per user remains low at close to $1, highlighting the challenges faced by the sector in balancing financial obligations with the need for technological advancements.
