ISLAMABAD: The federal government has proposed a 5% withholding tax on income earned by social media influencers through digital platforms, including YouTube, Facebook, Instagram and TikTok, under the Finance Bill 2026.
According to the proposed legislation, banks and non-banking financial institutions will be required to deduct the tax whenever payments linked to social media earnings are credited to or received in an account.
The bill defines a social media influencer as any individual or entity generating income through social media platforms. Payments covered under the proposal include domestic remittances, account transfers and direct credits related to digital content creation and online activities.
Under the proposed framework, resident individuals who are active taxpayers will face a 5% withholding tax on their social media income. Non-resident individuals and entities earning revenue through such platforms will also be subject to the same rate.
The Finance Bill states that the withholding tax will serve as the minimum tax liability for resident taxpayers. For non-residents without a permanent establishment in Pakistan, the deducted amount will be treated as a final tax.
The proposal is part of the federal budget for fiscal year 2026-27, presented by Finance Minister Muhammad Aurangzeb in the National Assembly on Friday.
The government has proposed a total budget outlay of Rs18.771 trillion, with Rs8.054 trillion allocated for debt servicing, Rs3 trillion for defence spending, and Rs1 trillion for the federal development programme.
