Content creators earning from platforms like YouTube, Instagram, and TikTok will now have tax deducted directly by their banks, as the federal government introduces a formal withholding tax on social media income in the budget 2026-27, a move that brings Pakistan’s rapidly growing creator economy firmly into the tax net.
The measure builds on the groundwork the government had already begun laying. Earlier this year, the Federal Board of Revenue issued SRO 545(I)/2026, mandating non-resident individuals earning money through social media in Pakistan to pay quarterly withholding tax and file a special income tax return. The 2026-27 budget now extends this framework to resident creators, with banks acting as the point of deduction, meaning tax will be automatically withheld when platform earnings are deposited into Pakistani bank accounts.
Under FBR’s draft SRO 546(I)/2026, a special procedure applies for taxation of persons earning income from remunerative social media content, with minimum income calculated using a formula based on total remuneration received and total expenses capped at 30% of total revenue. For YouTube specifically, the FBR defined a revenue per mille of PKR 195 per 1,000 views as the benchmark for this special procedure, subject to revision.
Pakistan’s creator economy has grown significantly over the past few years, with thousands of Pakistanis monetizing content on YouTube, TikTok, and Instagram, often receiving payments in dollars through bank transfers. Previously, a 5% advance tax was applicable on online earnings, including YouTube, with banks deducting these in advance, though enforcement and coverage remained inconsistent. TechJuice
The new budget measure tightens that framework, making banks the primary withholding agents, closing a long-standing gap where creator income often went unreported or under-reported.
