The federal budget has introduced a 5 percent withholding tax on income earned through social media platforms, while also announcing widespread reductions in customs duties across multiple sectors.

According to the Finance Bill, the new tax will apply to earnings from platforms including YouTube, Facebook, TikTok, and Instagram. Banks will be required to automatically deduct the tax from payments received by social media influencers and digital content creators.

Officials said the move aims to document the rapidly growing digital economy and expand the tax net to include online income sources that have largely remained informal.

At the same time, the budget brings major relief in customs tariffs. The government has reduced customs duty on several tariff lines, cutting rates from 20 percent down to 15 percent and 10 percent in selected categories.

Additional customs duty has also been reduced significantly. It has been lowered from 6 percent to 4 percent on 449 tariff lines, while 2,107 tariff lines now face a reduced rate of 2 percent instead of 4 percent.

Furthermore, additional customs duty has been completely removed on 569 items, signaling a broad-based effort to simplify import taxation. Regulatory duty caps have been set at a maximum of 20 percent on 359 tariff lines.

The Finance Bill also offers targeted exemptions, including zero customs duty on key raw materials used in cancer treatment, along with relief for agricultural machinery where customs, additional and regulatory duties have been abolished.

Customs duty on special construction vehicles has also been reduced from 20 percent to 10 percent, aiming to support infrastructure development and construction activity in the country.

Officials said these changes are part of a wider strategy to balance revenue generation with economic relief and industrial support.+