ISLAMABAD

The federal government has decided against reducing taxes on mobile phones in the Budget 2026-27, despite efforts by the Ministry of Information Technology and Telecommunication to secure relief for consumers and promote greater smartphone adoption across Pakistan.

The decision means that existing duties and taxes imposed on mobile handset imports and registrations will remain in place, disappointing industry stakeholders who had called for lower taxation to accelerate digital inclusion and support the government’s Digital Pakistan agenda.

Officials familiar with the budget process said the IT Ministry had advocated for a reduction in mobile phone taxes, arguing that affordable smartphones are critical for expanding internet access, boosting digital services, and increasing participation in the digital economy. However, revenue considerations ultimately outweighed the proposal.

Industry experts warn that maintaining high taxes on mobile devices could slow smartphone penetration, particularly among lower-income consumers, at a time when the government is encouraging the adoption of digital payments, e-governance services, online education, and emerging technologies.

The decision comes despite strong growth in Pakistan’s telecom and digital sectors. Recent official data shows smartphone usage and broadband adoption continuing to rise, while policymakers increasingly view connectivity as a key driver of economic growth and financial inclusion.

Stakeholders have urged authorities to revisit the issue in future fiscal measures, arguing that wider smartphone ownership could generate long-term economic benefits that outweigh short-term tax revenues.