FBR to Charge 4% Withholding Tax on IT Services in FY26

The Federal Board of Revenue (FBR) has confirmed that the withholding tax rate for IT and IT-enabled services will remain at 4 percent during 2025-26. According to an income tax circular, the Finance Act 2025 has set a flat 15 percent withholding tax rate for unspecified services and sports persons, up from the previous rates of 9 percent and 11 percent for companies and non-companies, and 10 percent for sports persons. For specified services under section 152, the rate has been increased from 4 percent to 8 percent, while under section 153, it has risen from 4 percent to 6 percent, excluding IT and IT-enabled services, which retain the 4 percent rate.