The Pakistani government has introduced a 5 percent withholding tax on income earned by digital content creators and social media influencers through online platforms. The new tax takes effect from July 1, 2026, under the Finance Act 2026.
According to the Finance Act 2026 issued on Monday, every banking and non-banking financial institution will deduct the tax when a payment is credited to or received in a person’s account. However, the deduction will apply only if the amount represents income generated through social media platforms.
The law defines a digital content creator or social media influencer as any individual or business that earns income by creating, publishing, or monetizing content on digital platforms. These platforms include YouTube, Facebook, Instagram, TikTok, and other similar services.
Moreover, the term “payment” includes all inward remittances, transfers, and credits received through banking channels. It also covers transactions processed by online payment service providers and digital financial platforms.
Under the new rules, the deducted tax will serve as a minimum tax for resident taxpayers. Meanwhile, it will be treated as a final tax for non-residents who do not have a permanent establishment in Pakistan.
In addition, the Finance Act gives the Federal Board of Revenue (FBR) the authority to issue detailed rules for implementing the new tax system. These rules will cover the identification, reporting, and monitoring of payments made to digital content creators and social media influencers.
