ICMA Suggests Taxes on Digital Services, Gaming, and Advertising as part of Pakistan’s Budget 2026-27 proposals. The recommendations target the digital economy, online gaming, corporate advertising, and second-home ownership. ICMA believes these taxes will formalize the informal sector and increase revenue from emerging industries.
The Digital Services Tax (DST) in Pakistan is a key part of the plan. It will apply to streaming platforms, mobile applications, and other online services. By implementing this tax, the government aims to encourage businesses in the digital economy to document and comply. Similarly, a gaming licensing regime and online gaming tax in Pakistan are proposed to regulate operators and convert informal gaming activity into taxable revenue. A 2 percent gross-revenue tax is proposed for licensed operators.
ICMA also recommends levies on corporate advertising and brand promotion. Companies with high turnover may face a corporate advertising levy to enhance documentation and tax compliance. In addition, property taxation measures such as the Additional Residential Property Tax (ARPT) or the second-home tax in Pakistan are proposed for investment properties valued at over Rs. 20 million. These taxes aim to reduce speculative investments and encourage fair real estate practices.
Other notable proposals include a Financial Transaction Tax (FTT) on equities, derivatives, and digital assets. Windfall sectors like sugar and oil may face a Windfall Gains Tax in Pakistan during periods of abnormal profits. Environmental initiatives, including green taxes in Pakistan, EV charging-station relief, and carbon market levies, are proposed to support sustainable development.
Overall, these ICMA tax proposals aim to strengthen Pakistan’s tax base, formalize the informal sectors, and support sustainable growth. Businesses and individuals should prepare for compliance, documentation, and strategic planning to minimize impact.
