ISLAMABAD – Budget 2025-26 is around the corner and Pakistani government is making desperate efforts to boost revenue, with YouTubers, freelancers and content creators likely to get slapped with new taxes.
The federal government is gearing up to introduce major tax reforms in 2025–26 budget, with special focus on digital content creators, freelancers, and social media influencers. The new measures aim to increase tax revenue by up to Rs600 billion as the South Asian nation seeks to meet IMF targets amid growing fiscal challenges.
A key proposal under consideration is 3.5 percent tax on income earned from popular social media platforms such as YouTube and TikTok. The tax could alone generate over Rs52.5 billion in revenue, signaling a new era of taxation for Pakistan’s booming digital economy.
This move is likely to impact content creators and freelancers who earn substantial income through online platforms. Many in this sector have previously operated with minimal formal taxation, but the government’s latest proposals indicate a crackdown aimed at widening the tax base and formalizing digital earnings.
Beyond social media, the budget plans also target high pensions, luxury goods, and essential commodities. A tax of 2.5% to 5% is proposed on monthly pensions exceeding Rs. 400,000, while General Sales Tax (GST) on items like sugar is set to be realigned with market prices, potentially increasing the burden on consumers.
Budget 2025-26
Excise duties on processed foods, including snacks and biscuits, are expected to rise by 20%, with plans to gradually push the rate to 50pc by 2029. Cigarettes may also see higher taxes, in line with ongoing health and revenue policies.
In a bid to improve tax compliance, a bill to abolish the “nonfiler” category has been introduced. Under this legislation, individuals who do not file income tax returns would face restrictions on purchasing vehicles and property, ensuring that more citizens enter the tax net.
Energy taxation is also on the table, with a possible increase of Rs. 5 per liter on petrol and diesel levies, framed as a carbon tax. This could raise between Rs. 35 billion and Rs. 80 billion depending on final rates. Additionally, a petroleum development levy on furnace oil is being reviewed.
To meet IMF-mandated revenue goals, the government must collect Rs. 295 billion from retailers by the end of 2025. This target may be achieved through higher advance taxes on distributors. The IMF has further recommended a 5% hike in federal excise duties on fertilizers and pesticides, expected to generate over Rs. 30 billion.
The upcoming budget, expected in June, will be closely watched by the digital community as it signals a shift in how online incomes are regulated and taxed. Content creators, freelancers, and social media influencers are advised to prepare for a more stringent tax environment as the government seeks to tap into new revenue streams in an increasingly digital economy.
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