Section 154 — Withholding on Export Proceeds
Section 154 export WHT Pakistan TY 2025-26 — 1% filer / 2% non-filer on export proceeds collected by bank, final tax for individual exporters.
Section 154 applies on the realisation of export proceeds in Pakistan — your bank deducts 1% (filer) or 2% (non-filer) on every inward foreign remittance attributable to export of goods or services. The deduction is generally final tax for individual exporters, freelancers, and Amazon/Etsy sellers whose foreign earnings hit a Pakistani bank.
Section 154 sits alongside the PSEB final-tax regime under Section 154A. PSEB-registered IT exporters get a reduced 0.25% final tax under 154A; non-PSEB exporters pay the standard 1%/2% under 154. The PSEB lever is worth registering for: at any meaningful export revenue, the saving versus 154 is large and the saving versus the non-salaried slab regime (which non-PSEB exporters fall into if they elect business-income treatment) is enormous.
The bank issues a year-end Section 154 WHT certificate documenting the deduction. PSEB-registered exporters declare the gross remittance under IRIS code 7033 (Final/Fixed Tax) with the WHT as final tax paid. Non-PSEB exporters can elect to treat 154 as final tax (simpler, no deductions) or as advance tax credit against slab-based business income with deductions allowed.
Frequently asked questions
What is the Section 154 rate?
1% for filers and 2% for non-filers on every inward foreign remittance attributable to export of goods or services, collected by the realising bank.
Is Section 154 final tax?
Generally yes for individual exporters. Business-income electors can treat it as advance tax credit and claim deductions against slab-based net income instead.
How does Section 154 differ from PSEB final tax?
Section 154 is the default 1%/2% on all exports. Section 154A is a reduced 0.25% final tax exclusively for PSEB-registered IT and digital services exporters.
Does Section 154 apply to Fiverr/Upwork freelancers?
Yes — every Fiverr, Upwork, or AdSense remittance is export of services and triggers Section 154 1%/2% at bank realisation, unless the freelancer is PSEB-registered (then 154A applies).