GSMA studies telecom tax cuts to boost Pakistan’s digital economy

By Usama Haider

ISLAMABAD, July 29, 2026 — The GSMA is assessing whether lower taxes on Pakistan’s telecom sector and affordable smartphones could increase broadband adoption, expand the digital economy, and eventually help the government recover more revenue through wider digital participation.

The evidence-based study is designed to give policymakers clearer options on how targeted tax reductions could affect smartphone ownership, internet usage, investment, and future government revenues.

Summary

• GSMA is assessing the economic impact of lower telecom and smartphone taxes.

• Greater device affordability could help Pakistan increase broadband and smartphone adoption.

• The study will examine whether wider digital activity could offset initial government revenue losses.

GSMA examines the impact of lower telecom taxes.

Julian Gorman, head of Asia Pacific at GSMA, outlined the initiative while addressing the media roundtable "Digital Pakistan 2030: The Next Phase of Digital Transformation." Pakistan 2030: The Next Phase of Digital Transformation.

Saira Faisal, the Country Lead for Digital Transformation at GSMA Pakistan, joined Julian Gorman at the media roundtable. Saira Faisal, the Country Lead for Digital Transformation at GSMA Pakistan, joined him.

The global mobile industry body is examining where telecom-related taxes could potentially be reduced and how quickly any initial loss in government revenue could be recovered through higher smartphone sales, increased broadband usage, and broader economic activity.

Taxes on low-cost smartphones are also part of the assessment because GSMA sees device affordability as a major factor in closing Pakistan’s digital usage gap.

The study is expected to provide the government with specific policy options rather than making a general recommendation for tax cuts.

GSMA said evidence-based policymaking is particularly important as Pakistan faces fiscal pressures and commitments under the International Monetary Fund (IMF) program.

The organization also pointed to its previous research indicating that a 10% increase in broadband penetration can contribute to GDP growth of between 1% and 2%, highlighting the wider economic potential of stronger digital connectivity.

Digital adoption could widen Pakistan’s tax base.

GSMA welcomed digitalization efforts by Pakistan’s federal and provincial governments, saying online public services and digital systems are giving more citizens practical reasons to own smartphones and use the internet.

The organization believes wider digital participation could also help bring more individuals and businesses into the formal economy.

That could potentially expand the country’s tax base instead of placing a greater burden on a relatively limited number of existing taxpayers.

GSMA also highlighted an investment gap in Pakistan’s telecom industry following years of uncertainty around spectrum availability, which limited network expansion.

Following the recent spectrum release, mobile operators are expected to invest billions of dollars over the coming years in expanding broadband coverage and improving network quality.

GSMA sets out Digital Pakistan 2030 priorities.

Senior representatives from the federal government, provincial governments, Gilgit-Baltistan, regulators, the mobile industry, and development partners also joined the GSMA Digital Nation Pakistan Ministerial Roundtable.

The discussions focused on practical measures needed to accelerate the delivery of Digital Pakistan 2030 and strengthen coordination between government institutions and the private sector.

GSMA also released a discussion paper titled Digital Pakistan 2030: Building Momentum for Sustainable Investment, Trust, and Inclusive Growth.

The paper highlighted progress in spectrum policy, smartphone and mobile internet adoption, women’s digital inclusion, cybersecurity, digital trust, and government-industry cooperation.

It identified five strategic priorities for Pakistan:

• Create greater certainty for long-term telecom infrastructure investment.

• Improve digital inclusion through affordability, skills, and rural connectivity.

• Prepare infrastructure for 5G, artificial intelligence, fiber, and data centers.

• Strengthen cybersecurity, digital identity, online safety, and anti-scam systems.

• Improve coordination between government, industry, and development partners.

Gorman said Pakistan had established important foundations for digital growth, but maintaining that momentum would require continued collaboration, shared priorities, and coordinated implementation.

GSMA’s broader Digital Pakistan 2030 Action Agenda similarly focuses on investment certainty, digital inclusion, trusted digital infrastructure, preparation for the AI economy, and stronger national coordination.

The telecom tax assessment will now help determine whether carefully targeted reductions could make smartphones and connectivity more affordable while delivering enough additional digital activity to compensate for revenue initially forgone by the government.

Source: The information in this article is based on [Business Recorder].

Could carefully targeted telecom tax reductions help Pakistan expand digital access without putting long-term government revenue at risk? Share your thoughts in the comments.