Pakistan’s Federal Board of Revenue (FBR) has introduced a 10% withholding tax on social media earnings received by digital content creators and influencers who do not appear on the Active Taxpayers List. The new rates took effect from July 1, 2026, under changes introduced through the Finance Act 2026.
The FBR’s latest Withholding Income Tax Rate Card for Tax Year 2027 confirms two rates under Section 154B. Creators appearing on the ATL face a 5% deduction, while non-ATL creators face a 10% rate.
Read More: FBR Targets Social Media Income as New Tax Rules Emerge in Pakistan
The new provision is titled “Withholding tax on revenues received from social media platforms.” It covers income earned through platforms such as YouTube, Facebook, Instagram and TikTok, as well as similar digital services.
Banks to Deduct Tax When Payments Arrive
Under Section 154B, banking and non-banking financial institutions must deduct the tax when social media revenue reaches a creator’s account. The law also covers payments routed through online payment providers and other digital financial platforms.
For example, an ATL-listed creator receiving Rs100,000 in qualifying social media revenue would face Rs5,000 in withholding tax. A creator outside the ATL would face Rs10,000 on the same amount.
For resident taxpayers, the law treats the deduction as minimum tax. For a non-resident without a permanent establishment in Pakistan, it operates as final tax.
The measure expands Pakistan’s tax framework into the fast-growing creator economy. It also creates a financial incentive for influencers, YouTubers and other online earners to remain on the ATL.
Read More: NCCIA Takes Notice of Social Media Campaign Against easypaisa
FBR says appearing on the ATL already gives taxpayers access to lower withholding rates across several types of transactions. The social media provision now extends that filer advantage to digital creator earnings.
The official FBR rate card is updated up to June 30, 2026 under the Finance Act 2026 and applies to Tax Year 2027. This corrects reports suggesting the new card itself remains applicable only through June 30, 2026.
Foreign Card Payments Also Get New Rates
The Finance Act 2026 has separately changed withholding tax on amounts remitted abroad through credit, debit and prepaid cards.
Under Section 236Y, taxpayers appearing on the ATL now face a 0.5% withholding rate on such transactions. The rate doubles to 1% for people outside the ATL.
This provision is separate from the tax on creator earnings. Section 154B applies when creators receive social media revenue, while Section 236Y covers money sent abroad through payment cards.
Read More: Pakistan EV Tax 2026: Which Electric Vehicles Will Be Taxed and Which Remain Exempt?
The Finance Act 2026 came into force on July 1 unless a provision specified otherwise. The new social media withholding regime therefore applies to qualifying payments received from that date.
The change means Pakistani creators now face a clear tax deduction at the banking stage. Those outside the ATL will effectively pay twice the withholding rate applied to listed taxpayers.
