PAA Voices Strong Opposition to Withholding Tax Increase

The Pakistan Advertisers Association (PAA) has expressed serious concerns regarding the increase in Withholding Tax (WHT) announced in the federal budget for FY26. The association has termed the measure unsustainable and is urgently requesting the government to reconsider its decision.

A PAA delegation, representing the advertising and marketing communications sector, participated in a post-budget consultation on Tax Anomalies. The meeting was organized by the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) at Federation House.

During the session, PAA conveyed the industry’s unified apprehension about the recent rise in WHT on specific services, including advertising, from 4% to 6%. They described this change as economically damaging and untenable. The delegation presented a detailed argument highlighting the severe consequences of the tax hike, suggesting it equates to a 17% super tax when considering the average net profit margins of just 15%.

PAA Chairman Ahmed Kapadia stated that the service-based businesses are already facing challenges from rising HR costs, higher utility expenses, and decreased client spending. He believes that this added tax burden further jeopardizes their financial stability.

Call for Reversal and Rationalization

“We implore the government to promptly reverse the increase and adjust the WHT to 3%, which accurately reflects the actual tax obligations of compliant service companies,” Kapadia added.

PAA’s formal appeal was presented to the FPCCI leadership, advocating for immediate discussions with the Federal Board of Revenue and the Ministry of Finance.

This action highlights PAA’s dedication to safeguarding the interests of Pakistan’s advertising and media sector during a period of increasing financial strain.