Pakistan’s 33% Mobile Service Tax Rate ‘Highest in Region,’ Warns GSMA

Pakistan’s mobile phone service tax rate is the highest in the region, creating a major obstacle to the country’s Digital Pakistan vision and discouraging foreign investors, according to a report by the GSM Association (GSMA).

The industry body highlighted that mobile services in Pakistan face an 18% sales tax and a 15% advance tax, making a total burden of 33%—far above regional peers. In contrast, mobile service taxes are 26% in Nepal, 23% in Sri Lanka, 18% in India, 12% in the Philippines, 11% in Indonesia, 9% in Singapore, 7% in Thailand, and 6% in Malaysia.

GSMA warned that these high tax rates are stifling digital growth and innovation. It further noted that Pakistan’s mobile industry earns less than $1 per user on average, compared to over $8 globally, leaving little room for operators to invest in infrastructure.

The report urged the government to review and reduce telecom taxes, stressing that a competitive tax structure is essential for attracting investment, expanding internet access, and accelerating economic growth.