Telecom sector welcomes ADB’s call for lower taxes

KARACHI: Pakistan’s telecom industry has welcomed the ADB’s latest policy recommendations, viewing them as long-overdue validation of its calls for urgent reforms to unlock the country’s digital potential.

Operators have welcomed the ADB’s focus on reducing taxation, increasing affordability, and addressing infrastructure and literacy barriers that continue to exclude millions from digital access.

Despite mobile broadband coverage reaching over 80 per cent of the population, only 54 per cent of Pakistanis are active mobile internet users. The ADB attributes this disconnect to high taxes, unaffordable smartphones and low digital literacy, particularly among women and in rural areas.

“Pakistan’s digital potential is immense, but it remains underrealised,” said Kazim Mujtaba, president of Consumer Division at Jazz. “The fact that millions remain offline despite being covered by mobile broadband reflects a systemic issue: for many, connectivity is still unaffordable.”

With fixed broadband penetration at only 1.3 per cent, the lowest in the region, the digital divide is most severe in rural and low-income communities. Mujtaba said, “If we are serious about building a resilient, future-ready Pakistan, digital reform must be treated as a national priority, not an afterthought.”

Pakistan remains among the most heavily taxed telecom markets in the region. Mobile broadband services face nearly 20 per cent in sales tax, along with additional import duties and inconsistent spectrum pricing, challenges that discourage investment and limit consumer access.

The report proposes reforms including reducing the general sales tax (GST) on telecom services to 5.0 per cent; decoupling spectrum pricing from the US dollar to ease currency pressure; and promoting public-private partnerships to expand digital infrastructure, especially in underserved regions.

It also highlights the importance of enhancing digital access in schools and healthcare facilities.While 5G remains a long-term goal, the industry stresses that bridging the current 4G usage gap is a more urgent priority.