ISLAMABAD: Banks in Pakistan have started deducting withholding tax from payments received by influencers, freelancers, and Digital Creator professionals through international online platforms. The new system applies when earnings are transferred into local bank accounts.
According to sources, the tax is being deducted directly by scheduled banks at the time foreign payments are credited. Platforms such as YouTube, Facebook, and Google AdSense are not making the deductions themselves.
Under the revised tax mechanism, filers are charged a withholding tax of 5 percent. Non-filers face a higher deduction of up to 10 percent on eligible payments.
The change follows the implementation of the Finance Bill 2026-27, which brought income earned through foreign digital platforms under the withholding tax system.
Officials said banks are now responsible for collecting the tax at the time of payment realization. This means the deduction takes place when the funds reach a Pakistani bank account rather than when the payment is issued by the digital platform.
The updated framework applies to a wide range of online income sources. These include earnings from social media monetization, digital advertising, sponsored content, and other internet-based revenue streams.
A Digital Creator earning through YouTube, Facebook, Instagram, or similar platforms will now receive payments after the applicable withholding tax has been deducted by the bank.
Sources explained that these earnings are being treated as part of Pakistan’s IT services exports. Revenue received from foreign digital platforms is considered export income because the services are provided to international companies.
The policy covers creators who earn through advertising revenue, content monetization programs, and other digital business activities. It also applies to freelancers and online entrepreneurs receiving payments from overseas platforms.
Officials clarified that international platforms are not collecting the tax on behalf of Pakistan. Instead, the responsibility has been assigned to the country’s banking system to ensure tax collection at the time of payment.
The move is expected to affect thousands of Pakistanis working in the digital economy. This includes YouTubers, influencers, bloggers, freelancers, online educators, and digital publishers who regularly receive foreign payments.
Industry observers believe the new system will improve tax collection from the rapidly growing digital sector. At the same time, many creators are expected to review how the deductions affect their overall income and financial planning.
The digital content industry has expanded significantly in recent years, with many Pakistanis building businesses through online platforms. Income from these services also contributes to the country’s IT export earnings.
In other news read more about Google Reveals Pakistan’s Massive Global Growth on YouTube
The new withholding tax framework marks an important change for every Digital Creator receiving payments from international platforms. As banks continue implementing the policy, creators are expected to pay closer attention to their tax status, since filers will benefit from a lower deduction rate than non-filers.
