Pakistan is facing a growing digital divide because high taxes on smartphones and telecom services are making internet access expensive for many people.
Although 81% of the population lives in areas covered by 3G and 4G networks, only 29% actually use the internet. This creates a 52% usage gap, mainly caused by affordability issues rather than lack of infrastructure.
The report by the Policy Research Institute of Market Economy says Pakistan treats digital connectivity as a source of tax revenue instead of essential infrastructure.
It highlights that Pakistan has one of the highest tax burdens on mobile phones and telecom services in the region.
These taxes include sales tax, withholding tax, regulatory duties and advance income tax, making devices and services much more expensive. Phones priced above $500 face a 25% sales tax, while premium smartphones can carry an effective tax burden of over 50%.
Even though more than 30 million phones are assembled locally each year, the study says local production value remains very low.
Most manufacturers still rely on imported kits instead of producing key components inside the country. Because of this, import dependency remains high and foreign exchange pressure continues despite local assembly growth.
Household survey data shows that a basic smartphone costing around ₨25,000 uses nearly 62% of income for the poorest families. Overall affordability is about 31% nationwide, showing that even middle-income groups face financial pressure.
This high cost of access affects women, students, freelancers and gig workers the most, limiting their opportunities. Affordable connectivity is essential for education, jobs, and economic growth in Pakistan.
