Budget 2026–27: Telecom sector demands wide-ranging tax relief
- By Aleem Malik -
- May 20, 2026
ISLAMABAD: Telecom operators in Pakistan have submitted their budget proposals for the fiscal year 2026-27, calling for significant tax relief and policy incentives to boost investment in digital infrastructure and expand connectivity across the country, ARY News reported.
According to reports, the telecom sector has urged the government to reduce withholding tax from 6 percent to 4 percent, arguing that the move would help improve industry growth and encourage further investment in broadband and mobile services.
The operators have also proposed extending the turnover tax credit period from two years to five years, stating that a longer adjustment window would support financial stability and infrastructure expansion.
In their budget recommendations, telecom companies further demanded the removal of customs duties on 5G equipment and fibre optic cables, estimating that the measure could unlock nearly $12 billion in additional investment, particularly in network expansion projects.
Industry players said reduced equipment costs would significantly improve internet access in rural areas and accelerate digital inclusion.
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Another key budget proposal includes reducing advance income tax on mobile users from 15 percent to 8 percent, with telecom operators stressing the need to make mobile services more affordable, especially for low-income prepaid consumers.
The sector has also called for the withdrawal of powers allowing adjustments to advance tax estimates, arguing that such mechanisms create uncertainty for businesses.
Telecom operators urged the government to take immediate steps for the expansion of 4G and 5G networks, warning that rising operational costs are slowing down digital progress in the country.
They added that over the past six years, the sector has invested more than $6.3 billion, while contributing over Rs1.9 trillion to the national exchequer, highlighting its importance to Pakistan’s digital economy.