GSMA Calls for Tax Reforms to Support Pakistan’s Mobile Sector Growth

Usama AnjumLast Updated: May 5, 2025

In a letter to Shaza Fatima Khawaja, Federal Minister for IT & Telecom, Jeanette Whyte, Head of Public Policy and External Affairs for APAC at GSMA, has called for urgent tax reforms to support the growth and sustainability of Pakistan’s mobile sector. The GSMA’s letter outlines the challenges posed by the current tax structure, which is hindering digital inclusion and economic development in the country.

Over the past decade, Pakistan’s mobile sector has experienced significant progress, with 4G coverage reaching 84% of the population. Despite this, the country faces a considerable digital divide, with a 59% usage gap, meaning a substantial portion of the population, though within coverage areas, does not use mobile internet services. Currently, only 24% of unique subscribers in Pakistan are using mobile internet, leaving 74% of the population unconnected. The GSMA warns that this usage gap represents a missed economic opportunity, preventing Pakistan from fully harnessing the potential of mobile technology for economic growth.

One of the primary challenges identified by the GSMA is the high tax burden on mobile services and devices, which makes internet access unaffordable, particularly for low-income groups. In addition, mobile operators in Pakistan face a range of sector-specific fees alongside general taxes, further straining their financial resources. This has made it difficult for operators to expand network coverage, sustain service quality, and invest in next-generation technologies.

The GSMA’s analysis of 2024 data from mobile operators in Pakistan reveals that taxes and fees account for approximately 42% of the sector’s revenue. This includes 18% from sector-specific charges, which is substantially higher than the regional average of 26% in South and Central Asia. The organization argues that reducing these sector-specific taxes and fees would make mobile services more affordable, promoting greater adoption, particularly among low-income populations.

In the letter, Jeanette Whyte emphasizes that a more balanced tax framework would not only make mobile services more accessible but also enhance the financial sustainability of mobile operators. This, in turn, would allow them to invest in network expansion and the deployment of next-generation technologies, contributing to Pakistan’s digital transformation and overall economic development.

The GSMA urges the government to prioritize these tax reforms in the upcoming 2025-2026 fiscal year budget, highlighting that timely reforms would be critical in fostering innovation, attracting global investments, and strengthening Pakistan’s position in the rapidly evolving global digital landscape.

The GSMA has expressed its willingness to engage in further dialogue with the government to support the implementation of these necessary reforms, which it views as essential for unlocking the full potential of mobile connectivity in Pakistan and driving digital inclusion across the country.