ISLAMABAD: The GSMA has urged the government to introduce tax reforms in the mobile telephony sector in the upcoming federal budget for 2025-26.
In a letter addressed to Shaza Fatima Khawaja, Minister for IT and Telecom, the global mobile industry body stressed the need for urgent reforms to address the challenges facing Pakistan’s telecom sector.
“Pakistan still faces a high usage gap of 59 percent, the highest in South Asia,” the GSMA said. This means that although mobile broadband coverage is widespread, around 74 percent of the population covered by mobile internet signals does not use the service.
The usage gap refers to the proportion of the population living within the coverage area of mobile broadband networks but not using mobile internet services.
The GSMA, which represents more than 1,200 members of the global mobile ecosystem, emphasized the role of mobile technology in fostering innovation, economic growth, and social development.
The letter, signed by Jeanette Whyte, Head of Public Policy and External Affairs at GSMA, highlighted that mobile operators in Pakistan face multiple sector-specific fees and taxes, which strain their financial resources.
“These financial burdens reduce operators’ ability to maintain service quality, expand network coverage, and invest in new technologies,” the letter noted.
Citing its analysis of 2024 data from Pakistani mobile operators, the GSMA revealed that the sector contributes about 42 percent of its revenues in taxes and fees, 18 percent of which comes from charges applied exclusively to the mobile industry. This tax burden is significantly higher than the South and Central Asia average of 26 percent and surpasses that of many other regions.
Despite significant growth over the past decade, with 4G coverage now reaching about 84 percent of the population, Pakistan continues to face challenges in digital inclusion.
“Mobile technology has enabled far-reaching benefits, including financial inclusion, access to education, and job creation, all contributing to socioeconomic development,” the GSMA stated.
It noted that mobile connectivity is a key driver of economic growth, with studies showing that a 10 percent increase in mobile broadband penetration can boost GDP per capita by up to 2.43 percent.
“The significant usage gap in Pakistan represents a missed economic opportunity,” the GSMA warned, adding that it also constrains operators’ revenue potential and limits their ability to invest in next-generation technologies.
The GSMA expressed concern that the current tax regime hinders progress toward bridging the usage gap. “High taxes on mobile devices and services make access less affordable, especially for low-income populations, limiting mobile internet adoption,” it said.
The organization called on the government to implement comprehensive tax reforms to promote affordability and inclusion. “Reducing sector-specific taxes and fees can make mobile services more affordable, encouraging greater adoption, particularly among underserved communities,” the GSMA urged.
A more balanced tax framework, it said, would enhance the financial sustainability of operators, enabling them to expand network coverage and invest in next-generation technologies.
“These reforms are critical to driving digital inclusion and unlocking the full economic potential of mobile connectivity in Pakistan,” the GSMA concluded.
