FBR Imposes 5% Withholding Tax on Social Media Earnings From July 2026

The Federal Board of Revenue has introduced a 5% withholding tax on revenues earned from social media platforms, bringing digital content creators and social media influencers under a new tax mechanism effective from July 1, 2026.

According to an income tax circular issued by the FBR, a new Section 154B has been inserted into the tax framework. The provision requires banks and non-banking financial institutions to deduct tax when payments linked to social media revenues are credited to or received in an individual’s account.

The deduction will apply at the rate specified in Division IIIAB of Part III of the First Schedule, which has been fixed at 5%.

Who Will Be Affected?

The measure applies to revenues received from social media platforms by individuals falling within the definitions of digital content creator or social media influencer.

The FBR has also formally defined the term “payment” for the purpose of the new section, making the deduction mechanism applicable at the point where such income reaches a recipient through a financial institution.

For resident taxpayers, the 5% deduction will be treated as minimum tax.

For non-resident individuals without a permanent establishment in Pakistan, the same deduction will be treated as a final tax.

The FBR has also made a consequential amendment to Section 169 to align the tax treatment with the new withholding provision.

The move marks a significant expansion of Pakistan’s tax net into the digital creator economy, as authorities seek to capture income generated through platforms such as video-sharing, social networking, and other online content services.