IT Ministry Proposes Tax Relief for Telecom Sector to Boost Investment

The Ministry of Information Technology and Telecommunication has proposed tax relief measures for the telecom sector, including an exemption from withholding tax, lower import duties on broadband and telecom equipment, and a reduction in the advance tax charged to mobile and internet users, sources said.

According to sources in the IT ministry, the proposals have been forwarded to the Ministry of Finance as part of efforts to reduce the cost of doing business for telecom operators and encourage fresh investment in digital infrastructure.

The ministry has recommended easing the withholding tax burden on telecom companies, arguing that the current tax collection system across nearly 65,000 telecom sites is increasing operational costs and complicating business processes for the sector.

Sources said the ministry has proposed that tax liabilities of telecom companies should be collected directly instead of through a withholding tax mechanism. The move, they said, is aimed at simplifying the tax collection process and improving ease of doing business for telecom operators.

The IT ministry has also proposed a reduction in import duties on broadband and telecom equipment. Officials believe lower duties could help operators expand and upgrade networks at a lower cost, particularly at a time when demand for high-speed broadband and digital services continues to rise.

Another key recommendation relates to consumers. The ministry has proposed reducing the 15 percent advance tax currently imposed on mobile and internet users, a measure that could ease the cost burden on millions of subscribers.

Sources said the ministry has also recommended simplifying the overall tax regime for the telecom sector to attract new investment. The proposals are part of a broader push to support telecom infrastructure expansion without relying heavily on public-sector funding.

The ministry has suggested that future telecom projects should be launched through private investment rather than government funding. Officials believe a more investor-friendly tax framework could help mobilize private capital for broadband expansion, network upgrades, and digital connectivity projects.

Pakistan’s telecom sector has repeatedly raised concerns over high taxation, rising operating costs, import restrictions, and expensive infrastructure deployment. Industry stakeholders argue that tax rationalization is necessary to sustain service quality, expand coverage, and prepare the country for next-generation connectivity.

If accepted by the Ministry of Finance, the proposals could provide relief to both telecom operators and consumers, while supporting wider broadband access and long-term investment in the country’s digital economy.

Also read:

Budget 2026-27: Govt Proposes Rs 20 Billion for IT & Telecom Projects, Far Below MoITT Demand