Digital Creators Face New Withholding Tax
The Senate Standing Committee on Finance and Revenue has approved a proposal to impose a 5 percent withholding tax on income earned through social media platforms.
The proposal was approved during the committee’s review of the Finance Bill 2026–27.
The meeting was chaired by Senator Saleem Mandviwalla. The committee reviewed the Income Tax Ordinance 2001 clause by clause.
Minister of State for Finance Bilal Azhar Kayani and senior officials from the Federal Board of Revenue briefed the committee on different tax and fiscal proposals.
During the session, FBR Chairman Rashid Mahmood Langrial said a growing number of people are earning significant income through social media platforms.
He said the government wants to bring this income into the tax system.
Income Up to Rs600,000 to Remain Exempt
According to the FBR chairman, annual social media income up to Rs600,000 will remain exempt from tax.
However, people earning between Rs600,000 and Rs1.2 million per year through social media will face a 5 percent withholding tax.
The committee approved the recommendation despite concerns raised by some members.
The proposed tax will apply to certain categories of digital income generated through online platforms.
The move comes as Pakistan’s digital economy continues to grow. More people are now earning through content creation, freelancing, influencer marketing, digital advertising and online platforms.
The government believes this expanding income stream should contribute to national revenue.
Senators Raise Concerns Over Digital Economy
Several committee members expressed reservations over the proposal.
Senator Saleem Mandviwalla said many people are earning through social media and should be allowed to benefit from the sector.
He noted that the proposal appears to be linked mainly to revenue collection.
Senator Abdul Qadir also questioned the need to tax social media income at this stage.
He said foreign exchange inflows should be encouraged. He added that people creating economic activity through digital platforms need support, not additional pressure.
Committee members warned that new taxes could affect young digital entrepreneurs and content creators.
They said Pakistan should promote online income opportunities, especially when unemployment remains a major challenge.
Despite these concerns, the committee proceeded with the approval of the 5 percent withholding tax proposal.
The measure will now move forward as part of the Finance Bill 2026–27 process.
If implemented, the tax could directly affect thousands of social media creators, influencers and digital workers earning through online platforms.
