The federal government of Pakistan is preparing to introduce sweeping tax reforms in the upcoming FY 2025–26 budget, with a particular focus on the digital economy. Among the most significant measures under consideration are new tax obligations for YouTubers, TikTokers, freelancers, and other digital content creators, as part of an effort to raise up to Rs600 billion in additional revenue.
One of the key proposals involves a 3.5% tax on income generated from digital platforms such as YouTube and TikTok. This alone is expected to contribute approximately Rs52.5 billion to the national exchequer.
The move marks a major shift toward formalizing the digital sector, which has largely remained outside the traditional tax net until now.
The government’s plan, reportedly aligned with International Monetary Fund (IMF) targets, is aimed at broadening the tax base amid mounting fiscal pressure. Digital content creators and freelancers, many of whom have operated with limited oversight, are likely to be significantly affected.
In addition to targeting online income, the proposed budget includes measures to tax high-value pensions, luxury items, and essential commodities. Pensions exceeding Rs400,000 per month may face a new tax of 2.5% to 5%. General Sales Tax (GST) on key items like sugar is also expected to be adjusted in line with current market prices.
To offset some of the burden, the government is considering a 2.5% across-the-board reduction in income tax for salaried individuals, along with proposed cuts to corporate tax rates and a 0.5% reduction in the super tax to encourage investment and stimulate economic activity.
