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News | invest.pk

The telecom crunch

April 14, 2025

The telecom sector in Pakistan is facing a wide range of taxation, pricing, and regulatory challenges impacting its growth, sustainability, and competitiveness. Some of these issues also extend into related sectors, such as solar infrastructure and local manufacturing, and together, they affect the broader business landscape in the country. One of the main challenges is the change in the Advance Income Tax (AIT) rate. While the Finance Act in December 2021 increased the rate from 10 per cent to 15pc, it was later reduced to 10pc for FY22 and 8pc for FY23. This tax only applies to tax filers, but most telecom users in the country are non-filers. As a result, the burden of the tax falls on consumers who are not even legally required to pay it, leading to questions about fairness and implementation.