The Telecom Operators' Association (TOA) has expressed its support for the federal budget 2026-27, acknowledging the government's efforts to maintain macroeconomic stability while advancing Pakistan's long-term development priorities. The association noted that the budget includes several positive measures that recognize the importance of digital connectivity and the digital economy.
Positive Measures in the Budget
TOA particularly appreciated initiatives aimed at boosting investment, affordability, and digital adoption. These include the government's indication to reduce customs duties on raw materials for local handset production, subject to enactment through the Finance Bill. This move is expected to improve device affordability and accelerate connectivity across the country.
The association also welcomed the rationalization of the super tax, which is anticipated to strengthen the investment environment and support growth in Pakistan's digital economy. TOA remains optimistic that additional industry-proposed reforms can be considered as part of the government's broader digital transformation agenda.
Concerns Over Tax Burden on Consumers
However, TOA highlighted that its longstanding request to reduce the tax burden on mobile consumers remains unaddressed. Mobile users continue to face a 19.5% General Sales Tax (GST) and a 15% advance withholding tax on telecom services, making connectivity less affordable for millions of Pakistanis.
With approximately 206 million mobile subscribers but only 7.7 million active taxpayers in the country, the vast majority of consumers are below the taxable income threshold. Consequently, they have no practical mechanism to recover the 15% advance withholding tax deducted from their mobile usage.
Call for Broadband Expansion and Infrastructure Investment
TOA also expressed hope that ongoing policy discussions will consider additional measures to support broadband expansion and long-term digital infrastructure investment. These include rationalizing duties on optical fiber infrastructure, which is essential for expanding broadband networks, accelerating fiber deployment, and preparing Pakistan for future connectivity requirements.
The association looks forward to continued progress on reforms that enhance tax certainty, reduce administrative discretion, and improve the ease of doing business. Such reforms are crucial for creating a stronger environment for investment and growth.
Telecom as Foundation of Digital Economy
TOA stressed that telecom serves as the foundation layer of Pakistan's digital economy. Reliable and affordable mobile connectivity supports financial inclusion, education, healthcare, e-commerce, agriculture, manufacturing, and public service delivery. It also provides the infrastructure for emerging technologies and digital services.
Sustained investment in telecom infrastructure is therefore essential not only for sectoral growth but also for the country's broader economic competitiveness and digital future.
Industry Leader's Statement
Commenting on the matter, Kamal Ahmed, Secretary General of TOA, said: "Telecom is an enabling industry that powers digital transformation across the entire economy. Policies that improve affordability, encourage investment, and accelerate infrastructure deployment generate benefits far beyond the sector itself, supporting productivity, innovation, financial inclusion, and economic growth."
He added: "We welcome the positive measures introduced by the government and are encouraged by the direction reflected in the budget. We remain hopeful that the government will also consider the additional reforms proposed by the industry, which can further accelerate digital adoption, investment, and Pakistan's broader digital growth agenda."
Right of Way Reform Welcomed
Separately, TOA welcomed the government's recent decision to make Right of Way (RoW) for telecom infrastructure free of charge. This important reform addresses a longstanding industry concern and will help accelerate network deployment, expand broadband coverage, lower infrastructure rollout costs, and improve connectivity for citizens and businesses across Pakistan.
TOA remains committed to working closely with the government and all stakeholders to advance Pakistan's digital agenda and looks forward to continued collaboration on policies that promote investment, innovation, and inclusive digital growth.
