Pakistan’s Telecom Sector Faces Revenue, Investment Decline Amid High Taxes, Warns ADB
The Asian Development Bank (ADB) report highlights a decline in revenues and foreign investment in Pakistan’s telecom sector, reflecting a tough business climate. It called on the government to engage with investors and industry stakeholders, offering incentives and resolving policy concerns to attract fresh investment.
The ADB also proposed a series of reforms to boost the digital economy: cutting corporate tax rates and business costs for SMEs by 10% for 10 years, conditional on formal registration and digital adoption; simplifying tax and forex rules for ICT exporters; offering tax credits for women-led businesses; low-interest loans for startups; and requiring banks to allocate at least 15% of loans to SMEs, with half earmarked for digital and ICT ventures.
Additionally, the report urged Pakistan to rationalize high digital infrastructure taxes — currently at 19.5% on internet services, the highest among comparable services — and to fix tax rates for the next 10 years to foster a stable, competitive environment.
