Budget 2025-26: YouTubers, Freelancers, and Digital Creators in Pakistan Face New Tax Burdens

ISLAMABAD – The federal government is preparing to present the Budget 2025-26 in June. As part of its plan to increase revenue, it may introduce new taxes on YouTubers, freelancers, and other digital earners.

The government is facing serious financial pressure. It needs to meet strict targets set by the International Monetary Fund (IMF). To do this, it is aiming to collect Rs600 billion in extra taxes.

One major proposal is a 3.5% income tax on earnings from platforms like YouTube and TikTok. This move could bring in more than Rs52 billion. This would be the first time many digital workers are taxed directly.

Freelancers and social media influencers who earn online may now have to pay formal taxes. Until now, many of them were not included in the tax net.

Besides digital earners, other sectors will also be affected. Monthly pensions above Rs400,000 may be taxed at rates from 2.5% to 5%. Items like sugar, snacks, and biscuits will become costlier as GST and excise duties go up.

Processed foods may see a 20% rise in taxes this year. By 2029, this rate could reach 50%. Cigarettes are also likely to face higher duties as part of a health-focused tax policy.

The government also wants to end the “non-filer” status. This means people who do not file tax returns may not be able to buy cars or property.

Fuel prices may go up too. A new Rs5 per liter carbon tax is being discussed for petrol and diesel. It could earn the government between Rs35 to 80 billion. Furnace oil may also be taxed more.

To meet IMF goals, the government must collect Rs295 billion from retailers by the end of this year. It may increase advance taxes on distributors and sales agents.

Another plan is to raise excise duties on fertilizers and pesticides by 5%. This could bring in more than Rs30 billion.

Many digital workers are worried about these changes. They say new taxes may reduce their income. Experts say it’s important to bring all earners into the tax system, but the process should be fair.

The budget will be announced in June. It is expected to bring many new changes, especially for the digital economy.