Mobile phone users in Pakistan continue to shoulder a significant tax burden on prepaid services, with multiple federal and provincial levies reducing the value of every recharge.

A consumer loading PKR 100 in prepaid mobile credit effectively receives only PKR 72.77 in usable balance after tax deductions.

Under the current taxation structure, an advance income tax deduction of PKR 13.04 is applied first, leaving the subscriber with PKR 86.96. A further 19.5% sales tax is then charged on the remaining balance, deducting PKR 14.19 and reducing the final usable credit to PKR 72.77.

In total, consumers pay approximately PKR 27.23 in taxes on a PKR 100 prepaid recharge, highlighting the substantial tax burden on mobile users.

The taxation of mobile services has long been a point of concern for consumers and the telecom industry, which argues that high taxes increase the cost of digital connectivity, discourage mobile and internet adoption, and slow Pakistan’s digital transformation efforts.

Industry stakeholders have repeatedly urged policymakers to rationalize telecom taxes, saying lower taxation could improve affordability, expand digital inclusion, and support the country’s growing digital economy.