ICMA proposes new taxes on digital services

• Targets streaming platforms, gaming, digital media, second-home ownership, corporate ads• Advocates carbon and pollution levies for industries

ISLAMABAD: The Institute of Cost and Management Accountants of Pakistan (ICMA) has proposed new levies in the coming Budget 2026-27, including taxes on digital services, online and speculative gaming, corporate brand promotion, and second-home ownership, to expand the country’s struggling tax base.

In its new taxation measures, submitted to the Tax Policy Office (TPO) of the Ministry of Finance, the statutory body of accounting and management professionals, said the proposals had been developed after careful analysis of Pakistan’s economic priorities, sectoral challenges, and international best practices to broaden the tax base and formalise emerging sectors.

The proposals are organised under seven key segments, including new revenue initiatives to broaden the tax base, climate and green taxation, urban and transport revenue, corporate and financial services, formalising digital and informal economy for tax revenue, agriculture and rural income and wealth and luxury tax.

The ICMA proposed a Digital Services Tax to capture revenue from Pakistan’s rapidly growing digital economy, including streaming platforms, gaming, mobile applications, and other digital media. This measure, it said, would formalise digital business activities, ensure equitable contribution to public revenue, and strengthen fiscal resources. The expected impact is to encourage compliance, formalisation of the digital sector, and alignment with international best practices.

It also proposed a regulated licencing and taxation framework for online and speculative gaming, which is largely unregulated and accessed via offshore platforms. ICMA recommended that only licenced operators should be allowed to operate under government oversight, paying a 2pc tax on gross revenues. This measure will convert informal and illegal activity into a legally monitored and taxed sector, protect consumers, and create a stable revenue source.

To leverage corporate visibility and turnover, ICMA........

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