Govt introduces digital tax law targeting social media and online businesses

By Muhammad MubashirPublished On 11 Jun 2025

According to reports, income derived from audio, video, and music streaming services will now be subject to tax, along with other digital sectors.

The legislation also applies to telemedicine, e-learning platforms, cloud services, and online banking in Pakistan. Furthermore, e-commerce websites, online stores, and digital marketplaces will also fall under the scope of the new tax regulation.

Banks and exchange companies involved in transferring payments to foreign companies in exchange for goods or services will be required to deduct a 5 percent tax.

This tax must be deposited into the Pakistan national treasury by the 7th of each month. Failure to deduct or deposit the tax will result in legal action against the concerned financial institutions.

Under the new framework, all social media platforms operating in Pakistan are now obligated to submit quarterly reports to the government.