How Pakistani Banks Withhold Tax on Creator Platform Receipts Under Section 154B

Pakistan began withholding tax on income that creators receive from social media platforms on 1 July 2026. Under Section 154B of the Income Tax Ordinance, 2001, as amended by the Finance Act 2026, banks and non-bank financial institutions must deduct the tax from qualifying receipts. The deduction is made at the earlier of crediting funds to a bank account or receiving payment through banking channels.

The measure began as one of the tax proposals in the Finance Bill 2026. In June, the National Assembly Standing Committee on Finance and Revenue endorsed it, according to Profit by Pakistan Today. The same report says FBR officials estimated social media income in Pakistan at Rs4 billion to Rs10 billion and described digital platform earnings as largely outside the tax net.

Which Payments Fall Under Section 154B

The reports name YouTube, Facebook, Instagram and TikTok as the platforms whose payouts are covered. The rule applies to any amount credited to, or received in, a person’s account that represents social media platform revenue.

Coverage extends to inward remittances, fund transfers and credits received through banking channels. Profit reports that payments routed through intermediaries, such as online payment service providers and digital financial platforms, are also included. PK Revenue describes the trigger as the earlier of crediting funds to a bank account or receiving payment through banking channels.

The deduction is made by banks and non-bank financial institutions.

PK Revenue says the tax applies to digital content creators and social media influencers who earn income from creating, publishing or monetising content, irrespective of the platform through which the content is monetised. It says the rule also covers similar platforms beyond the four named above.

The Start Date
Profit by Pakistan Today reports that banks and non-bank financial institutions will deduct 5% of social media platform revenue under Section 154B from 1 July 2026.

The 5% and 10% Rates Reported for Creators

Zameen.com reports that creators on the Active Taxpayers List face a 5% rate on platform revenue, while creators who are not on the list face 10%. It links the rates to an updated Withholding Tax Card 2026 and gives 1 July 2026 as the effective date.

PhoneWorld and TechJuice report the same split. TechJuice gives 5% for filers and 10% for non-filers. PhoneWorld says the 10% rate is backdated to 1 July 2026 and ties it to the Withholding Tax Card 2026; its report was last updated on 12 August 2026.

Profit’s 30 June report describes a 5% deduction without that split and applies it to both residents and non-residents. Its 19 June report describes 5% as the proposed rate in the Finance Bill 2026.

Daily Pakistan also gives 5%. It says taxpayers not on the Active Taxpayer List may face a higher effective tax burden under other provisions. The same report says the latest draft does not introduce the 5% withholding tax, which conflicts with the Profit, Zameen, PhoneWorld, TechJuice and PK Revenue reports. It also says a draft would replace references to YouTube with social media platforms in the income calculation rules.

Minimum Tax for Residents, Final Tax for Non-Residents

For residents on the Active Taxpayers List, Profit reports that the deduction counts as minimum tax. Creators still work out their annual liability under the normal regime, after deducting legitimate business expenses, and pay any shortfall. If the annual liability is lower than the amount deducted, the excess is not refundable, adjustable or carried forward. Profit’s 30 June report lists equipment, internet, studio rent and software as examples of the expenses that may be deducted. Daily Pakistan says the deduction generally operates as minimum tax for resident taxpayers.

For non-residents without a permanent establishment in Pakistan, the deducted amount is final tax, according to both PK Revenue and Profit’s 30 June report. Daily Pakistan says this final-tax treatment is subject to legal conditions.

Profit’s 19 June report says social media earnings would lose the reduced 0.25% final tax rate that IT and software exporters keep until tax year 2029. Profit’s 30 June report says the Finance Bill 2026-27 extended the 0.25% regime for general IT and software exporters to Tax Year 2029 but excluded social media creators.

TechJuice reports that the FBR allows expenses only up to 30% of total revenue. It says creators argue that equipment, editing software, internet and travel often exceed that limit, and that they have asked the FBR to review the withholding regime. The same report cites a minimum benchmark of Rs195 per 1,000 YouTube views.

The deduction is made at the earlier of crediting funds to a bank account or receiving payment through banking channels.

Start Date, Tax Year and Pending Rules

Profit’s 30 June report gives 1 July 2026 as the start date under the Finance Act 2026. PK Revenue places the rules under Tax Year 2027, effective from the same date, so the two reports agree on timing and differ on the label. Daily Pakistan also gives 1 July 2026 as the date the mechanism has applied.

Profit’s 19 June report describes the measure as part of the Finance Bill 2026, while its 30 June report refers to the Finance Act 2026. Profit reports that the FBR may issue implementing rules through a Gazette notification.

Daily Pakistan says the draft would amend Rule 13ZP of the Income Tax Rules, 2002 for residents and Rule 19R for non-residents. It says comments are accepted for seven days from publication in the official Gazette. It names SRO 1640(I)/2026, SRO 1641(I)/2026 and SRO 1642(I)/2026, issued in September 2026, as the broader framework.

PK Revenue reports that the FBR has notified the 5% tax, but its text gives no notification date or SRO number for the social media provisions. TechJuice cites different SRO numbers, 642(I)/2026 and 1641(I)/2026, for the Rs195 benchmark. Whether the September instruments have been notified in final form is not confirmed in the sources cited here.

The Revenue Estimate and Creator Response

According to Profit’s 19 June report, FBR officials told the committee that earnings from digital platforms, including YouTube, were rising quickly and largely remained outside the tax net. They put social media income in Pakistan at between Rs4 billion and Rs10 billion. The committee, chaired by Syed Naveed Qamar, endorsed the proposal as part of the tax measures in the Finance Bill 2026.

Profit presents the range as an estimate given to the committee.

TechJuice gives examples of per-post earnings for smaller creators, from Rs500 to Rs25,000 for accounts under 10,000 followers. It reports that a YouTube video with 100,000 views yields roughly Rs5,000 to Rs20,000, and that mid-tier creators combining platforms can earn Rs50,000 to Rs400,000 a month.

TechJuice argues that a fairer framework could push more creators to formalise their earnings rather than avoid the banking system. It also reports that Pakistan’s IT exports reached a record $4.6 billion, and that creators’ platform ad revenue is classified as IT service exports.