ISLAMABAD: The government has proposed a 5 percent withholding tax on income earned by social media influencers through digital platforms such as YouTube, Facebook, Instagram and TikTok under the Finance Bill 2026.
According to the Finance Bill 2026, every banking and non-banking financial institution will be required to deduct tax at the time of credit or receipt of any amount in an account that represents revenue received from social media platforms.
The bill defines a social media influencer as any individual or entity that generates income through a social media platform. The proposed withholding tax will apply to payments received through domestic remittances, electronic transfers, or account credits.
For resident individuals who are active taxpayers, the 5 percent deduction will constitute the minimum tax liability on income earned from social media platforms. Non-resident individuals and entities receiving such income will also be subject to a 5 percent withholding tax.
For non-residents who do not have a permanent establishment in Pakistan, the withholding tax deducted will be treated as a final tax, according to the bill.
The proposal is part of the government’s broader efforts to expand the tax base and improve documentation of income generated through digital and online platforms.
Finance Minister Muhammad Aurangzeb on Friday unveiled the federal budget for FY2026-27, proposing a total outlay of Rs18.771 trillion as the government seeks to navigate economic challenges amid regional tensions and concerns over global energy supplies.
