Government to reduce taxes on mobile phone users and telecom sector

The telecom sector in Pakistan has been given the status of ‘Industry’ due to which the federal government will now gradually reduce various taxes imposed on the sector and mobile phone users of the country.

As per the detail, on the recommendations of the Ministry of IT and Telecommunication, the Federal Cabinet granted the telecom sector with ‘industry’ and has also approved the introduction of simple and easy tax system and exemption of the telecom sector from all withholding taxes and complex collections.

With the new development, the government will from next fiscal year (2021-22), reduce the advance income tax on mobile phone users reduced from 12.5 per cent to 10 per cent and in the financial year 2022-23, it will go further down to 8 per cent.

Similarly, the federal excise duty (FED) on telecommunication services has been reduced from 17 per cent to 16 per cent, said the Federal Minister for IT and Telecommunication, Syed Amin-ul-Haque.

The minister said that the government is planning to reduce 6 per cent excise duty along with tax reduction on various services, adding that “PKR250 charges on sim purchase have been withdrawn, and this will be beneficial for the public.”


The ministry has termed the development as a major achievement that will directly benefit not only the mobile phone users in Pakistan, but will also help spread the “spirit of digital Pakistan (connectivity) to remote areas of the country”.