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.
ADB Urges Pakistan to Enforce 5% Uniform GST on All Digital Transactions
High, Uneven Digital Taxes Threaten Pakistan’s Investment Climate, Warns ADB
The Asian Development Bank (ADB) has recommended that Pakistan introduce a uniform 5% general sales tax (GST) on all digital transactions. This step, the ADB says, would boost nationwide e-commerce adoption, curb cash-based inefficiencies, and help document the informal economy.
In its newly released report on Pakistan’s digital ecosystem, the ADB also warned that high and inconsistent taxes on digital services and infrastructure threaten foreign investment and could hinder the growth and expansion of Pakistan’s digital economy if left unaddressed.
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