The Ministry of Information Technology and Telecommunication has proposed a package of tax relief measures for the telecom sector, including exemptions from withholding tax and a reduction in taxes on mobile and internet services.

According to sources, the ministry has formally recommended to the Ministry of Finance that the tax burden on telecom operators be eased to support industry growth, improve investment prospects, and accelerate digital expansion across the country.

Officials argue that the current tax collection framework, which applies to nearly 65,000 telecom sites nationwide, imposes significant operational and compliance costs on telecom companies. The ministry believes the existing withholding tax mechanism adds unnecessary administrative complexity and increases the cost of doing business.

To address these issues, the ministry has proposed shifting to a direct tax collection system instead of the current withholding tax model. The recommendation aims to simplify compliance procedures and reduce financial pressure on operators.

The ministry has also suggested granting withholding tax exemptions and streamlining tax administration to create a more business-friendly environment. In addition, it has recommended reducing import duties on telecom equipment and broadband infrastructure to facilitate network upgrades and improve digital connectivity.

Sources further revealed that the ministry has proposed lowering the 15 percent advance tax currently charged on mobile and internet users. It has also called for broader tax reforms to attract private investment into the telecom sector.

As part of its recommendations, the ministry has suggested that future telecom infrastructure projects should primarily be financed through private-sector investment rather than government funding.