The Federal Board of Revenue (FBR) will implement a 5 percent Withholding Tax on earnings from social media platforms, targeting “digital content creators” and “social media influencers,” starting July 1, 2026.
An income tax circular released by the FBR on Tuesday disclosed the introduction of a new section 154B. This section mandates that all banking and non-banking financial institutions must deduct tax at the rate outlined in Division IIIAB of Part III of the First Schedule when crediting or receiving any amount in an individual’s account, provided that the amount pertains to revenues from social media platforms.
Definitions for the terms “digital content creator,” “social media influencer,” and “payment” have been established for this section.
The tax deducted will be considered a minimum tax for resident individuals and a final tax for non-resident individuals without a permanent establishment in Pakistan.
The tax deduction rate under Division IIIAB has been set at five percent, with a corresponding amendment made to section 169, as stated by the FBR.