Study Suggests Lowering Mobile Phone Taxes Could Significantly Boost Pakistan’s Economy

Pakistan could ultimately increase total tax revenues by reducing heavy mobile sector taxes, according to the latest Frontier Economics report for VEON

The report argues that cutting taxes on mobile services would initially reduce direct telecom revenue, but stronger digital usage and broader economic growth would gradually offset the loss.

It models a reduction in the overall mobile tax burden from 37 percent to 17 percent, including lower sales tax, removal of advance income tax on users, and a cut in regulatory duty.

Under this scenario, the government would face an estimated short-term revenue loss of about $439 million. However, the report says this is only around 1% of total tax collection and could be recovered over time.

By 2031, improved connectivity and higher economic activity are projected to push overall tax revenue above the baseline, while GDP per capita growth could rise from 4.2 percent to 4.5 percent.

By 2034, the net fiscal gain could reach around $680 million, according to the study.