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.
Survey Shows Public Support for 5% Tax on Social Media Creators
A majority of Pakistanis support the government’s proposal to impose a 5 percent withholding tax on income earned by social media influencers, according to a new survey by the Press Network of Pakistan (PNP). However, respondents also urged policymakers to protect small creators through exemptions and supportive measures. The online survey was conducted after the government announced the proposal in the Finance Bill 2026. It included responses from 100 participants, comprising 45 men and 55 women. The findings showed broad support for bringing digital creators into Pakistan’s formal tax system. At the same time, respondents stressed that taxation should not discourage young entrepreneurs or people entering the digital content industry. The proposed 5 percent withholding tax forms part of the Finance Bill 2026. The government says the measure aims to document income generated through social media platforms and improve tax collection. Officials from the Federal Board of Revenue (FBR) have noted that earnings from digital platforms have grown rapidly in recent years while much of that income remains outside the country’s tax net. According to government estimates, Pakistan’s social media economy generates between Rs4 billion and Rs10 billion annually. Survey highlights support for fair taxation The PNP survey gave the proposed 5 percent withholding tax an average support score of 3.42 out of 5. Meanwhile, respondents expressed even stronger support for the broader principle that influencers should pay taxes like other professionals and businesses. That statement received an average score of 3.89 out of 5. However, participants also recognised potential challenges. They gave an average score of 3.34 out of 5 to concerns that the tax could discourage young people from pursuing careers in digital content creation. Many respondents supported exempting smaller creators from the proposed tax. The recommendation to exclude influencers earning below a certain income threshold received an average score of 3.88 out of 5. Read More: Why Traditional News Outlets Are Losing Ground to Social Platforms Participants also strongly supported government incentives alongside taxation. That recommendation received the survey’s highest average score of 3.92 out of 5. The report concluded, “As Pakistan’s digital economy continues to expand, balanced policymaking will be essential to ensure that taxation strengthens rather than hinders one of the country’s fastest-growing sectors.” YouTube creators expected to feel the biggest impact The survey also explored which platforms would feel the greatest impact if the proposal becomes law. A total of 53.8 percent of respondents said YouTube creators would face the biggest effect. Another 24.6 percent believed the tax would affect all social media platforms equally. Meanwhile, 9.2 percent selected Instagram, while 6.2 percent identified TikTok. Facebook and blogs or websites each received 3.1 percent of responses. Pakistan’s digital creator economy has expanded rapidly in recent years as thousands of individuals generate income through YouTube, TikTok, Instagram, Facebook and other online platforms. Industry experts say the sector has created new employment opportunities, particularly for young entrepreneurs and freelancers. The survey suggests that most Pakistanis support taxing influencer income. At the same time, they want the government to adopt balanced policies that encourage innovation, protect small creators and promote long term growth in the country’s expanding digital economy.
