Govt Imposes 5% Withholding Tax on YouTubers, TikTokers and Social Media Influencers

The federal government has imposed a 5 percent withholding tax on income earned by digital content creators and social media influencers through online platforms, with the new measure set to take effect from July 1, 2026, under the Finance Act 2026.

According to the Finance Act 2026, banking and non-banking financial institutions will be required to deduct the tax at the time any payment is credited to, or received in, the account of a person where the amount represents revenue generated through social media platforms.

The law defines a digital content creator or social media influencer as any individual or entity earning income by creating, publishing, or monetizing content on digital platforms. These platforms include YouTube, Facebook, Instagram, TikTok, and other similar online services.

The term “payment” has been defined broadly to include inward remittances, transfers, or credits received through banking channels. It also covers transactions processed through online payment service providers and digital financial platforms.

Under the new provisions, the deducted tax will be treated as a minimum tax for resident taxpayers. However, for non-resident persons who do not have a permanent establishment in Pakistan, the tax will be considered a final tax.

The Finance Act also empowers the Federal Board of Revenue to notify rules for implementing the new tax regime. These rules may include mechanisms for identifying, reporting, and monitoring payments made to digital content creators and social media influencers.

The move marks a major shift in Pakistan’s taxation of the digital economy, as the government seeks to bring online earnings from content creation, influencer marketing, and platform monetization into the formal tax framework.

Also read:

Senate Committee Approves 5% Withholding Tax on Social Media Earnings Above Rs 600,000