VAT and Duties Slashed in Talk Time and Internet Usage

Thirteen days after increasing supplementary duties, the National Board of Revenue (NBR) has reduced VAT on eight sectors, including mobile talk-time, internet, medicine, and restaurants. The increased VAT on non-branded apparel has also been withdrawn.

The NBR announced the decision in a press release on Wednesday, January 22. According to the relevant SRO, supplementary duties imposed under SO 12.14 on services utilizing mobile SIM/RIM cards, as well as all supplementary duties levied on internet service providers (ISPs), have been waived.

The notification stated, “To sustain the ongoing digitization efforts, build a tech-savvy young generation, and enhance online-based activities, the increased or newly imposed supplementary duties on services rendered through mobile SIM/RIM cards and ISP services have been completely withdrawn. As a result, consumer costs for these two sectors will not increase.”

Additionally, in the interest of public welfare, the increased VAT on motor vehicle garage and workshop services has also been entirely withdrawn, ensuring service prices remain unaffected.

Earlier, on January 9, the government issued the “Value Added Tax and Supplementary Duty (Amendment) Ordinance, 2025” and “The Excises and Salt Act (Amendment) Ordinance, 2025” to strengthen the country’s financial framework. Following appeals from professional organizations, civil society, and stakeholders, the NBR revised VAT and supplementary duty rates on several products and services through four new SROs.

In response to the initial duty increases, the Mobile Phone Subscribers’ Association organized a protest in front of the Press Club, urging the government to recognize internet services as a fundamental right under the constitution. Related stakeholders, under the banner of TIPAPP, demanded affordable internet access for all citizens instead of imposing taxes. Consumer groups further warned of escalating demonstrations, including besieging the NBR and the Secretariat, if their demands were ignored.