Telecom Operators Warn High Duties Could Delay 5G Rollout in Pakistan

Telecom operators in Pakistan have warned that high import duties and regulatory taxes are threatening the rollout of 5G and expansion of broadband services, urging the government to rationalize taxes in the Budget 2025-26.

As Pakistan eyes a nationwide 5G rollout, telecom companies are raising alarm over the heavy taxes imposed on imported telecom equipment, which they say could severely delay critical infrastructure upgrades. They are calling for urgent duty rationalization in Budget 2025-26 to support faster digital expansion.

Operators import essential network infrastructure such as RAN, core, and transmission equipment from globally recognized vendors like Huawei and Nokia. However, the equipment is currently subject to multiple layers of taxation — including a 5.5% advance income tax, up to 21% customs duty, and regulatory duties of 5% to 15%, based on inflated customs-assessed values.

Telecom stakeholders argue that these assessments often double the actual transaction value, violating Section 25 of the Customs Act, 1969, which mandates valuation based on the actual transaction price. The industry has urged the government to remove the 9% regulatory duty under HS Code 8517.6290 and to zero-rate lithium-ion batteries and SIM cards, which are also import-dependent and essential for connectivity.

The telecom sector has also asked for the complete removal of the 5% regulatory duty on power equipment, including batteries, pointing out that these are not for resale and should not be subjected to retail-based tax assessments. They propose using Section 25 instead of 25D for valuation to better reflect real costs.

Industry players have emphasized that reducing taxes will ease the financial burden on telecom companies and accelerate the rollout of 5G and other broadband infrastructure, ultimately enhancing digital inclusion across Pakistan.

Without this tax rationalization, the sector warns, Pakistan risks falling behind in global connectivity benchmarks, further delaying progress in digital transformation.