GSMA Urges Pakistan for Lower Mobile Service Taxes

The Global System for Mobile Communications Association (GSMA) has urged the federal government to reconsider the current tax structure on mobile services in Pakistan. In a recent pre-budget submission, GSMA highlighted that Pakistan faces the highest combined tax burden on mobile usage among nine comparable countries. Users currently pay a total of 33 percent in taxes—18 percent in sales tax and 15 percent in advance income tax—on mobile recharges.

According to the report, this rate exceeds that of Nepal, Sri Lanka, India, and several Southeast Asian nations. GSMA pointed out that such heavy taxation is limiting both the affordability of mobile services for consumers and the ability of the industry to invest and grow.

To address these concerns, GSMA recommended lowering the advance income tax on recharges from 15 percent to 12.5 percent and the sales tax from 18 percent to 16 percent. The association also suggested reducing or eliminating import duties on mobile devices. Additional proposals include reducing taxes on telecom operators, removing advance tax on license and spectrum renewals, and extending tax exemptions similar to those enjoyed by the banking and oil sectors.