Senate Committee Demands Lower Mobile Phone Taxes to Protect Affordability and 5G Growth

A Senate panel has called for an immediate reduction in taxes on mobile phones in Pakistan, warning that heavy taxation is hurting smartphone affordability, digital access and the country’s 5G rollout. The demand puts lawmakers in direct tension with the government’s stated position that no further tax relief is planned.

The Senate Standing Committee on Cabinet Secretariat, chaired by Senator Rana Mahmood-ul-Hassan, met this week and urged the government to cut the tax burden on imported handsets and bring in a clearer, more transparent valuation mechanism for imported phones. Members said the current structure prices ordinary Pakistanis out of the smartphone market and risks slowing down 5G expansion just as the country prepares to deploy next-generation networks.

Senate panel says high phone taxes are blocking digital Pakistan

Lawmakers argued that mobile phone taxes in Pakistan are among the key barriers to digital inclusion. With smartphone ownership now essential for everything from banking to education to small business, they said taxing handsets at punishing rates works against the government’s own digital agenda.

The committee chairman proposed completely removing taxes on tablets — a category widely used by students and educators — while reducing duties on mobile phones. He warned that if taxation stays at current levels, it could choke off 5G adoption before the technology even takes off, since 5G-ready devices cost significantly more than basic 4G handsets.

Senators question whether phones should be taxed at all

The push was backed by Senators Mohammad Abdul Qadir, Saadia Abbasi and Dilawar Khan. Senator Qadir went further, questioning whether mobile phones should be taxed at all, arguing they are no longer luxuries but tools of livelihood and connectivity for millions of Pakistanis.

The lawmakers’ position reflects a growing sentiment that imported handset taxation in Pakistan has tilted the market unfairly. Officials have previously told a National Assembly committee that imported handsets carry an effective tax burden of around 54 per cent, while locally assembled phones enjoy a much lighter load — a gap the Senate panel believes is pushing consumers toward the grey market instead of the legal route.

PTA briefs committee: 37 companies now assemble phones locally

The PTA chairman briefed the committee on the state of local manufacturing, telling senators that 37 companies are now assembling phones locally and roughly 31 million phones have been manufactured domestically. He added that around 92 per cent of mobile phones in the country are currently not subject to tax, with only about 8 per cent taxed — though he acknowledged that most locally made phones still lack 5G capability.

The briefing highlighted the balancing act facing policymakers: protecting the nascent local assembly industry, which needs tariff support to survive against fully built imports, while not pricing legal imported handsets so high that consumers turn to smuggled or unregistered devices.

Government had ruled out further tax cuts last week

The Senate’s demand sets up a direct clash with the Finance Ministry’s position. On October 14, 2026, Finance Minister Muhammad Aurangzeb told the National Assembly that the relief already given in the 2026-27 budget is final — including cutting income tax on phones priced between 100 and 200 dollars from Rs930 to Rs100 and slashing the mobile handset levy from Rs600 to Rs200 — and that no further cuts were planned.

The minister’s statement was meant to close the debate, but the Senate committee’s unanimous position suggests it is far from over. Industry watchers expect the issue to be raised repeatedly in the coming weeks, particularly as the 5G spectrum auction moves forward and operators begin network planning.

What lower phone taxes would mean for buyers

For ordinary buyers, a cut in mobile phone taxes in Pakistan would most immediately show up in the price of imported smartphones — the flagship devices from international brands that carry the heaviest tax load. A clearer valuation mechanism, as demanded by the committee, would also reduce the uncertainty buyers currently face, where identical models can be assessed at different values depending on the valuation officer.

Consumer groups have long argued that high handset taxes push buyers toward unregistered devices, which then get blocked by the PTA’s Device Identification, Registration and Blocking System. Lower, predictable taxes would bring more of that trade into the formal system, potentially raising overall revenue even at lower rates.

Whether the government listens remains to be seen. But with the Senate, the PTA and industry all pointing at the same problem, pressure for mobile tax relief in Pakistan is now coming from more directions than the Finance Ministry can easily dismiss.

Sources: official Senate committee proceedings and media reports.