Overview
- The Finance Bill, presented Friday, June 12, 2026, would add Section 154B to the Income Tax Ordinance to require a 5% tax withholding when payments linked to social media revenue are credited to accounts.
- Banks and non-banking financial institutions would act as withholding agents and must deduct tax at the time of credit, inward remittance, transfer, or receipt routed through payment service providers.
- Withheld amounts would be treated as a minimum tax for resident taxpayers on the Active Taxpayers’ List and as a final tax for non-residents who do not have a permanent establishment in Pakistan.
- The proposal builds on earlier FBR draft SROs that recommended an RPM-based computation (PKR 195 per 1,000 YouTube views) and a 30% cap on deductible expenses but does not clarify how those draft rules will interact with the new statutory withholding regime.
- Creators can expect immediate cash-flow and compliance impacts while the FBR prepares implementing notifications covering definitions, identification and reporting mechanisms, and the operational role of banks and payment platforms.