Social Media Creators to Face 5% Tax After Senate Panel Decision

Pakistan’s digital economy is entering a new phase as the Senate Standing Committee on Finance and Revenue has approved a proposal introducing a 5% withholding tax on selected categories of social media income under the ongoing Finance Bill 2026 review. The decision was taken during a detailed clause-by-clause examination led by committee chairman Saleem Mandviwalla in its third consecutive meeting, where lawmakers also discussed amendments to the Income Tax Ordinance, 2001. As Pakistan’s online ecosystem expands rapidly, the committee focused on how to balance regulation with growth, especially in areas like content creation, influencer marketing, and digital freelancing. Officials from the Federal Board of Revenue (FBR) highlighted that a rising number of individuals are now earning significant revenues through platforms such as YouTube, Instagram, TikTok, and digital advertising networks, making it essential to bring this income into the formal tax net. Under the proposed structure, annual earnings up to Rs. 600,000 will remain exempt, while income between Rs. 600,000 and Rs. 1.2 million will be subject to a 5% withholding tax. Lawmakers emphasized encouraging digital entrepreneurship while ensuring fair contribution to national revenue. The proposal will now be included in final recommendations before parliamentary approval.