A new report has highlighted the growing impact of taxes on smartphone affordability in Pakistan. The study says high duties and levies are making mobile phones too expensive for many consumers. It also warns that the issue is widening the country’s digital divide.
The report was released by the Policy Research Institute of Market Economy. It examined how taxes and tariffs are affecting smartphone prices and internet access across the country.
According to the findings, a smartphone priced at $700 internationally becomes far more expensive in Pakistan after taxes. Researchers estimate that the total tax burden reaches 50.26 percent on such devices.
The report stated that a mobile phone worth around Rs. 196,000 globally costs nearly Rs. 294,500 in Pakistan after adding taxes and duties. These charges include regulatory duties, sales tax, mobile levies, and withholding taxes.
Researchers said the current taxation structure has made Pakistan one of the costliest smartphone markets in the region. The report argues that affordability remains the biggest challenge for digital connectivity.
The study also discussed the role of the Pakistan Telecommunication Authority in controlling illegal devices. According to the report, the PTA blocked nearly 100 million unauthorized mobile phones during FY2024–25.
The report noted that heavy taxation is encouraging the growth of the grey market. Many consumers turn to cloned or illegally modified devices because officially registered phones are too expensive.
Researchers believe the digital gap in Pakistan is linked more to affordability than network coverage. Around 81 percent of the population lives in areas covered by 3G and 4G services. However, only 29 percent actively use the internet.
The report said high smartphone prices and telecom taxes are limiting access for lower-income groups. It added that many people cannot afford quality digital devices due to rising costs.
The telecom sector also faces multiple layers of taxation. These include advance income tax, federal excise duty, and provincial sales tax. According to the report, the combined burden equals around 42 percent of operator revenues.
Researchers warned that this situation reduces investment capacity for telecom companies. It may also slow the expansion of broadband and future mobile networks.
The report further reviewed Pakistan’s mobile manufacturing policy. It stated that local assembly has attracted nearly $300 million in investment and created over 60,000 jobs. Despite this progress, localization remains below targets.
The PTA was also mentioned in connection with efforts to regulate the smartphone market. Officials continue working to reduce the use of unauthorized devices in the country.
In other related news also read PTA Launches WhatsApp Helpline for 24/7 Support
To improve affordability, researchers recommended replacing the current tax structure with a uniform 18 percent sales tax on imported smartphones. They believe lower taxes and better regulation by the PTA could help reduce smuggling and improve digital access across Pakistan.
