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June 15, 2026
The federal government has proposed a 5% withholding tax on income earned by social media influencers through digital platforms, with banks and financial institutions responsible for deducting the tax at the time of payment or account credit.
The federal government has proposed a 5% withholding tax on income earned by social media influencers through platforms such as YouTube, Facebook, Instagram, TikTok, X, and other digital content-sharing services as part of the Finance Bill 2026.
According to Geo News and The News International, the proposed measure would require all banking and non-banking financial institutions to deduct tax whenever payments linked to social media earnings are credited to an account or received by an individual or entity.
Presenting the federal budget in the National Assembly, Finance Minister Muhammad Aurangzeb said, “This budget is being presented at a time when Pakistan has achieved the status in the eyes of its people and the world as a country whose voice is listened to, and whose friendship is desired.”
Under the Finance Bill 2026, the withholding tax will apply to income generated through social media platforms by resident individuals who are registered as active taxpayers. Non-resident persons receiving income from such platforms will also be subject to a 5% withholding tax under the proposed framework.
The bill defines a social media influencer as any individual or entity that earns income through a social media platform. The definition covers content creators, digital influencers, streamers, and other online personalities generating revenue through advertising, sponsorships, platform monetisation programmes, or related digital activities.
According to the proposed mechanism, banks and financial institutions will deduct the tax at the time funds are credited, transferred, or received. Payments may include domestic remittances, electronic transfers, or direct account credits originating from digital platforms.
The Finance Bill further states that the withholding tax will constitute the minimum tax liability for resident persons earning income through social media platforms. For non-resident individuals or entities that do not maintain a permanent establishment in Pakistan, the deducted amount will be treated as a final tax liability.
The proposal forms part of broader taxation and documentation measures introduced in the federal budget for fiscal year 2026-27. The government has increasingly focused on expanding the tax base by incorporating emerging sectors of the digital economy into the formal taxation framework.
The proposed tax on social media earnings is expected to affect a rapidly growing segment of Pakistan’s digital economy, where thousands of content creators generate income through international and local online platforms. The measure will now be reviewed as part of the parliamentary budget process before any final approval and implementation.
