The government is reportedly considering a set of major tax relief measures for Pakistan’s telecom and broadband sector in the upcoming federal budget for FY2026-27, in a move aimed at strengthening digital infrastructure and speeding up preparations for 5G services.
According to informed sources, policymakers are reviewing a proposal to sharply reduce import duties on fibre optic cable, cutting the overall tax burden from nearly 60 percent to around 5 percent. The step is expected to encourage telecom operators and internet service providers to expand Fibre-to-the-Site networks across the country at a faster pace.
At the same time, authorities are also looking at easing taxes on internet services to bring down costs for consumers. At present, users pay around 19.5 percent in provincial taxes along with a 12.5 percent federal withholding tax, which significantly increases monthly internet bills.
Industry players have long argued that high taxes on both infrastructure and services have slowed broadband growth and limited access, especially in smaller cities and rural areas. They believe a more balanced tax structure could help close the digital gap.
Officials say the proposed reduction in fibre-related duties is designed to lower deployment costs and support rapid network expansion, which is considered essential for a smooth rollout of next-generation 5G technology in Pakistan.
Telecom experts warn that without a strong fibre backbone, the country may struggle to fully benefit from 5G speeds and services. They stress that large-scale fibre expansion is key to improving network reliability and capacity.
Government officials involved in budget discussions say easing the tax burden on digital services is also being considered to boost internet usage, support freelancers and the IT sector, and improve access to affordable high-speed connectivity.
A senior official said the government recognises that affordable broadband and strong digital systems are central to economic growth and future competitiveness, adding that final decisions will be taken during budget deliberations.
Telecom industry representatives have welcomed the possible reforms, saying reduced duties and lower internet taxes could attract investment, improve service quality, and expand coverage nationwide.
The upcoming budget is expected to place a stronger focus on digital infrastructure as Pakistan prepares for future spectrum auctions and eventual commercial 5G launch.
