he Pakistan Advertisers Association (PAA) has strongly condemned the recent increase in Withholding Tax (WHT) on specified services, including advertising, from 4 percent to 6 percent, as announced in the federal budget for Fiscal Year 2026. The association has branded the hike an “unsustainable measure” and is urging the government to immediately reverse the decision.
A PAA delegation voiced the industry’s collective concern during a post-budget consultative meeting on Tax Anomalies, convened by the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) at the federation house.
“Equivalent to a 17 Percent Super Tax”
The PAA presented a detailed case highlighting the severe impact of the WHT hike. According to their analysis, this 2 percent increase is equivalent to a 17 percent “super tax” when viewed in relation to the advertising industry’s average net profit margins, which stand at a mere 15 percent.
Ahmed Kapadia, Chairman of PAA, emphasized the critical situation facing service-based businesses. “In an environment already strained by rising HR costs, inflated utility bills, and reduced client spending, this additional tax burden threatens the viability of service-based businesses,” he stated.
Call for Immediate Reversal and Rationalization
The PAA is calling for immediate action from the government. “We urge the government to immediately reverse the hike and rationalize the WHT to 3%, reflecting the true tax liability of compliant service firms,” Kapadia added.
A formal written appeal from the PAA has been submitted to the FPCCI leadership, requesting immediate advocacy with the Federal Board of Revenue (FBR) and the Ministry of Finance. This intervention underscores the PAA’s firm commitment to safeguarding the interests of Pakistan’s advertising and media industry during a period of escalating financial pressure and economic challenges.
