15% Withholding Tax Imposed on Independent Professional Services from July 1, 2026
The Federal Board of Revenue raises the withholding tax to 15% on independent professionals such as doctors, lawyers, architects, accountants and software developers, while adjusting rates for other service categories.
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Desk Analysis
How This Affects the Exchange
Sector Effect
Negative · Do not buy
Higher 15% WHT on independent professionals raises costs for Technology and Services firms, leading to a negative bias – Don't buy.
Sectors & Direction
Desk read
Desk call: Do not buy · Negatively affected
- TechnologyNegatively affected
Companies
Mentions in This Briefing
Sectors: Technology — Negative · Do not buy. PSX tickers: OGDC, PPL, MARI, PSO, SNGP, ATRL. Higher 15% WHT on independent professionals raises costs for Technology and Services firms, leading to a negative bias – Don't buy.
Full Story
Open on Business Recorder## New Withholding Tax Rate
The Federal Board of Revenue (FBR) announced that, effective July 1, 2026, a 15% withholding tax (WHT) will be levied on payments made to independent professional service providers. The categories covered include doctors, lawyers, architects, accountants and software engineers or developers working on a freelance basis.
## Changes to Existing Tax Structure
The budget explanatory circular also revised other service‑related WHT rates under Division III of Part III of the First Schedule: - The advance WHT rate for services in sub‑paragraph (i) rises from 6% to 7%. - A new 12% rate applies to gross payments made to companies for terminal and port operating services. - A 14% rate is set for other unspecified services.
## Impact on Debt Securities
In addition, the withholding tax on the disposal of debt securities (Section 151A) is increased from 15% to 20% on the gross capital gain amount.
## Rationale and Expected Effect
The FBR indicated that the adjustments aim to broaden the tax base and increase revenue collection. Companies that regularly engage independent consultants or outsource software development may see higher transaction costs, while firms dealing with debt securities will face higher tax on capital gains.
## What Investors Should Note
Listed companies with significant reliance on independent professional services—particularly in the technology and consulting segments—may experience margin pressure. Investors should monitor cost implications for firms such as software houses and professional services providers.