ISLAMABAD: The federal government has proposed a 5% withholding tax on income earned by social media influencers on platforms such as YouTube, Facebook, Instagram and TikTok.
According to the Finance Bill 2026, every banking and non-banking financial institution will be required to deduct tax at the time of crediting or receipt of any amount in an account where the amount represents income received from social media platforms.
Under the proposal, a 5% tax deduction will apply to income received by resident individuals who are active taxpayers. Non-residents receiving income via these platforms will also be subject to 5% withholding tax.
The Finance Bill 2026 defines a social media influencer as any person or entity that earns income through a social media platform.
It further clarifies that payments can be made through domestic remittances, transfers or account credits. The proposed tax will constitute the minimum tax payable for resident persons.
For non-residents who do not have a permanent establishment in Pakistan, the withholding tax deducted will be treated as a final tax, according to the bill.
Finance Minister Muhammad Aurangzeb on Friday presented a budget totaling Rs 18,771 billion as the federal government tries to balance a fragile economic situation due to an energy crisis amid tensions in the Middle East.
Presenting the third budget of his tenure in the National Assembly, the Finance Minister said: “This budget is presented at a time when Pakistan has acquired the status, in the eyes of its people and the world, of a country whose voice is listened to and whose friendship is desired.”
Giving a breakdown of the envisaged budget of Rs 18,771 billion, the finance minister said the largest share – Rs 8,054 billion – has been earmarked for surcharge payments, followed by Rs 3,000 billion for defense and Rs 1,000 billion for the federal development programme.
