Mobile Phone Users Pay Up to 34.5% in Taxes on Mobile Services in Pakistan

Mobile phone users in Pakistan continue to bear a significant tax burden on mobile services, with total taxes reaching up to 34.5% on prepaid mobile usage.

A customer who loads Rs100 as prepaid mobile balance does not receive the full amount for calling, texting, or using mobile data. Instead, multiple taxes are deducted before the balance becomes available for use.

Mobile Phone Users Pay Up to 34.5% in Taxes on Mobile Services in Pakistan

The first deduction is made in the form of advance income tax. Out of a Rs100 recharge, Rs13.04 is deducted under the 15% advance income tax, leaving the user with a remaining balance of Rs86.96.

After this deduction, the remaining balance is also subject to 19.5% sales tax. This results in another deduction of Rs14.19, reducing the usable balance to Rs72.77.

As a result, a customer who pays Rs100 for a prepaid mobile recharge can only use Rs72.77 for mobile services, while Rs27.23 is collected in taxes through these two deductions alone.

Industry figures also indicate that the overall tax burden on mobile users reaches 34.5%, making mobile communication more expensive for millions of consumers across the country.

Pakistan has one of the largest mobile subscriber bases in the region, with millions of people relying on prepaid mobile connections for communication, internet access, education, and digital financial services. The high level of taxation on mobile services increases the cost of staying connected, particularly for low-income users who depend on small recharge amounts.

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Consumer groups and industry stakeholders have repeatedly argued that lowering taxes on mobile services could encourage greater digital inclusion, increase mobile internet adoption, and support the country’s digital economy. They believe that reducing the tax burden would make telecom services more affordable and help connect more people to online education, e-commerce, banking, and government services.

For now, however, prepaid users continue to lose a notable portion of every recharge to taxes before they can use their mobile balance. A Rs100 top-up ultimately provides only Rs72.77 worth of usable credit after the applicable tax deductions.