Starting July 1, 2026, banks and non-banking financial institutions in Pakistan will automatically deduct a 5% withholding tax whenever income from social media platforms is credited to your account.
This rule comes from the Finance Act 2026 and the new Section 154B, which separates digital content creators from the lower 0.25% tax rate that general IT exporters will continue to enjoy until Tax Year 2029.
The tax covers anyone earning from YouTube, Facebook, Instagram, TikTok, and similar platforms, including influencers, streamers, and creators who monetize through ads, brand deals, sponsorships, or other online activities.
Banks will apply the deduction on inward remittances, account transfers, and any credit linked to social media revenue, whether it comes directly or through payment intermediaries and digital financial services.
For residents on the Active Taxpayers List, the 5% works as a minimum tax, meaning it is collected upfront and counts toward your annual liability, with any balance due when you file your return.
If your calculated tax is less than what was withheld, the 5% still stands as the minimum.
For non-residents without a permanent establishment in Pakistan, the 5% is a final tax, so no further filing is required for that income.
Annual social media earnings up to Rs. 600,000 remain exempt, but amounts between Rs. 600,000 and Rs. 1.2 million will see the5% deduction.
Creators should confirm their ATL status, track which bank credits are platform income, and prepare for reduced cash flow since the tax is taken before funds reach them.
The change aims to bring platform monetization into the tax net while keeping traditional IT exports under the concessionary regime.
