Advertising, social media and digital marketing services

Advertising and marketing agencies — and the growing field of digital and social-media specialists — provide services, and services are taxed by the provinces. With clients often spread across the country and campaigns that sometimes include physical deliverables, agencies need to know which authority taxes what. This guide frames the position for the sector.

A taxable provincial service

Advertising and marketing are services, so they fall under provincial sales tax administered by the authority for the province where the service is rendered — PRA, SRB, KPRA or BRA — with Islamabad services under FBR. This spans the whole sector: media buying and creative work by traditional agencies, and the campaign management, content and paid-social work of digital and social-media marketers. The tax is provincial and separate from the federal sales tax on goods. An agency's sales-tax-on-services obligation therefore sits with the province, whatever its income tax position.

Digital and social media

Digital and social-media marketing services are services in the same way as traditional advertising, so they generally fall within the provincial services regime. As the sector has grown, provinces have moved to capture digital marketing explicitly in their schedules, reflecting how much advertising spend has shifted online. Because this is an evolving area — the treatment of online, platform-based and cross-border digital services is still developing — the precise scope and rate for a particular digital service should be confirmed with the relevant authority rather than assumed from the position for conventional advertising. The safe assumption is that digital marketing is within the provincial net; the detail is what needs checking.

Clients across provinces, and goods in campaigns

Two practical wrinkles complete the picture. First, agencies commonly serve clients in several provinces, and because the tax depends on where the service is rendered or the client is located, an agency can fall under more than one authority and need multiple registrations — the same place-of-provision issue that IT firms face. Second, where a campaign includes physical goods — printed materials, branded merchandise, signage the agency supplies — those goods follow the federal regime, while the service element stays provincial. A campaign that mixes creative services with supplied print can therefore straddle both systems, and the invoice should reflect that split.

Common mistakes

• Assuming digital and social-media marketing is outside the provincial services net.
• Registering only where the agency is based, not where its clients are served.
• Treating physical campaign deliverables as part of the service rather than as federal goods.
• Relying on the conventional-advertising treatment without checking the digital-services position.

Where it fits

Advertising shares the multi-province challenge of other professional services and sits on the federal-versus-provincial divide when goods enter a campaign. For province detail, see the Punjab (PRA) and Sindh (SRB) overviews. Marketing is a provincial service; supplied goods are federal.

Where the rate actually comes from

Advertising is taxed as a service in every provincial regime, but campaigns that bundle production, media buying and printed materials can straddle a services rate and a federal goods rate in the same invoice. Fix the rate per component before the invoice is raised.

The standard rate is 16 per cent in Punjab and 15 per cent in Sindh, Khyber Pakhtunkhwa and Balochistan, with telecommunication services higher at 19.5 per cent and Islamabad Capital Territory administered by FBR. Sindh has also moved from a positive list to a negative list, so a Sindh service is taxable unless it is specifically exempt — if you concluded some years ago that you were outside the net, that conclusion needs re-testing. The full picture is in the rates by province guide; the authoritative figure for your own category is in the current working tariff published by Punjab Revenue Authority or the authority for your province.

Source check: 14 September 2026. Standard provincial rates and the Sindh negative-list reform are sourced in the rates-by-province guide. The category treatment described above is general orientation and has not been confirmed line by line against any authority's current schedule — read your own entry in the applicable working tariff before invoicing.

Sources

This guide is written against the official and clearly labelled professional references below. Rates, thresholds and portal procedures change between reviews, so open the primary source before relying on a figure.

• Punjab Revenue Authority sales tax guidance
• Sindh Revenue Board
• Khyber Pakhtunkhwa Revenue Authority
• Balochistan Revenue Authority
• Sales Tax Basics (FBR)

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