A delegation from Pakistan Advertisers Association participated in the Post-Budget Consultative Meeting on Tax Anomalies hosted by FPCCI, presenting a detailed appeal against the recent increase in withholding tax on specified services. The meeting provided a platform for industry stakeholders to raise their concerns following the federal budget announcements. PAA used the opportunity to advocate for a reversal of the WHT rate on advertising and related services, which was raised from 4% to 6%. Industry representatives described the adjustment as an excessive financial burden that risks damaging the sustainability of businesses operating in the marketing and communications sector.
According to PAA, the increased WHT rate places an unfair strain on compliant service providers. Citing sector-wide financial data, PAA explained that when applied to companies operating on average net profit margins of 15%, the revised tax functions as a 17% super tax—far exceeding the realistic tax liability of most firms in the sector. In the context of a market already affected by escalating operational costs, such as higher human resource expenses and utility charges, the change was labeled as disproportionate and harmful to economic activity.
Ahmed Kapadia, Chairman of Pakistan Advertisers Association, expressed these concerns during the consultation, warning that the WHT increase could severely impact the business viability of agencies and service providers. He emphasized the importance of recognizing the economic contribution of the sector and called for the rationalization of the tax structure. Kapadia proposed that the withholding tax be revised to 3%, which he argued would be more reflective of the true obligations of firms that are already compliant with tax regulations.
PAA’s delegation submitted a formal appeal to FPCCI leadership, urging the organization to take the matter forward to the Federal Board of Revenue and Ministry of Finance for immediate consideration. The submission included financial analysis and impact assessments outlining how the tax revision disproportionately affects businesses that rely heavily on service-based revenue models, many of which operate on tight margins amid reduced advertising budgets from clients across industries.
This move by PAA signals continued engagement with economic policymaking bodies to ensure that taxation policies support rather than stifle sectoral growth. The association reiterated its commitment to defending the collective interests of advertisers, agencies, and allied service providers, while encouraging the government to adopt more data-driven and equitable taxation approaches that align with business realities.
