ISLAMABAD

A new industry-backed study has warned that rising telecom taxes and regulatory levies are slowing Pakistan’s digital growth, increasing the cost of mobile connectivity and limiting internet access for millions of consumers.

The report argues that high taxation on mobile services, smartphones and telecom infrastructure is creating major barriers to digital inclusion, particularly for low-income users and rural populations.

According to the study, Pakistan remains among countries with some of the heaviest tax burdens on mobile consumers in the region, with users facing multiple charges including advance income tax, withholding tax and telecom service levies.

Industry experts say excessive taxation is discouraging mobile broadband adoption at a time when Pakistan is attempting to accelerate digital transformation, e-commerce expansion and technology-driven economic growth.

The report warns that high mobile service costs are particularly affecting prepaid users, who make up the overwhelming majority of Pakistan’s telecom subscribers.

Telecom analysts argue that rising operational expenses, spectrum costs and taxation pressures are also slowing investments in next-generation infrastructure including 4G expansion, fiberization and future 5G deployment.

The study reportedly highlights that affordable internet access has become increasingly critical for sectors such as education, freelancing, digital banking and online entrepreneurship.

Experts believe reducing telecom taxes could help improve smartphone penetration, increase internet usage and expand participation in Pakistan’s growing digital economy.

The findings come as Pakistan’s telecom industry repeatedly calls for fiscal reforms ahead of the upcoming federal budget, urging the government to lower taxes on mobile services and digital infrastructure to stimulate investment and connectivity growth.

Industry stakeholders have also argued that reducing taxes could ultimately increase long-term government revenues by expanding the country’s digital user base and formalizing more economic activity online.

Pakistan currently has more than 190 million mobile subscribers, but broadband adoption and smartphone affordability challenges continue to limit the country’s overall digital potential.

Technology observers say the debate over telecom taxation is becoming increasingly important as governments worldwide attempt to balance revenue generation with the need for affordable digital access and competitive technology ecosystems.