ISLAMABAD, May 20 (APP):The Global Mobile Industry Association GSMA has called for targeted telecom tax reforms in the upcoming federal budget for FY2026–27, stating that a more balanced fiscal framework could strengthen digital infrastructure investment and accelerate nationwide connectivity. In a letter addressed to Federal Minister for Finance and Revenue Muhammad Aurangzeb, the GSMA appreciated recent reforms in Pakistan’s telecom sector, particularly updates in the spectrum policy and auction framework, …
GSMA calls for targeted telecom tax reforms in FY2026–27 budget
ISLAMABAD, May 20 (APP):The Global Mobile Industry Association GSMA has called for targeted telecom tax reforms in the upcoming federal budget for FY2026–27, stating that a more balanced fiscal framework could strengthen digital infrastructure investment and accelerate nationwide connectivity.
In a letter addressed to Federal Minister for Finance and Revenue Muhammad Aurangzeb, the GSMA appreciated recent reforms in Pakistan’s telecom sector, particularly updates in the spectrum policy and auction framework, noting that these measures have already created renewed investor confidence and positive momentum for digital expansion.
The association described the reforms as aligned with international best practices, adding that they have sent a strong signal of stability and predictability to the industry.
It also observed that Pakistan has made meaningful progress in reducing the mobile internet usage gap and expanding digital adoption across the country.
Emphasising the importance of sustained policy continuity, the GSMA said targeted tax adjustments could help operators accelerate network deployment, improve service quality, and extend connectivity to underserved and remote regions, contributing to broader digital inclusion and economic growth.
In its recommendations for the Finance Bill 2026–27, the GSMA said the government has an opportunity to revisit sector taxation in light of renewed investment activity and evolving digital infrastructure needs.
The organisation identified three priority areas for reform: aligning sector-specific taxation with national investment objectives, improving the affordability of mobile services and smartphones, and simplifying tax structures to reduce compliance burdens and improve long-term investment predictability.
It added that supportive fiscal measures could help operators accelerate network rollouts, improve service quality, and expand connectivity in underserved areas, while contributing to broader economic growth and digital inclusion.
The GSMA said a “calibrated approach to fiscal reform” could create a “virtuous cycle of investment, innovation, and economic growth,” while reinforcing recent progress in Pakistan’s digital and spectrum policy landscape.
Separately, the Telecom Operators Association (TOA) has also proposed fiscal and regulatory measures for FY2026–27 aimed at accelerating broadband expansion, improving affordability, and supporting nationwide 4G and 5G deployment.
Among its proposals, the industry body recommended reducing advance income tax on telecom usage from 15 percent to 8 percent, arguing that high upfront taxation continues to constrain digital adoption, particularly among low-income and prepaid consumers.
The association also called for the removal of customs duties on 5G and fixed broadband equipment to support faster deployment of next-generation networks and fibre infrastructure.
It further proposed reducing the cumulative duties and taxes on optic fibre cable imports—currently estimated at around 67 percent—to a maximum of 5 percent.
Other recommendations included reducing withholding tax on telecom operators from 6 percent to 4 percent and extending the carry-forward period for turnover tax adjustments from two to five years.
