The Pakistani government has proposed new tax measures targeting income earned through social media platforms, bringing digital content creators and influencers under a broader tax framework.
According to the Finance Bill, a new Section 154B is proposed to be added to the Income Tax Ordinance, introducing withholding tax on earnings generated from platforms such as YouTube, Facebook, Instagram, TikTok, X (formerly Twitter), and other digital channels.
Under the proposal, banks and non-banking financial institutions will be required to deduct tax when payments from social media platforms are credited to account holders. The measure will also apply to payments received through online payment service providers and digital financial platforms.
The proposed tax regime covers digital content creators, social media influencers, and individuals earning revenue through online platforms. Income received from abroad through banking channels and digital payment systems will also be subject to tax deductions.
For Pakistani residents, the withholding tax will be treated as a minimum tax, while for non-resident individuals, it will be considered a final tax. The Federal Board of Revenue (FBR) is expected to issue detailed rules and reporting requirements for the implementation of the new provisions.
The proposal is part of the government’s broader efforts to expand the tax base and regulate the rapidly growing digital economy.
