What happened
A parliamentary committee on Monday approved a five per cent withholding tax on earnings generated through social media platforms by local and foreign digital content creators, as lawmakers continued their clause-by-clause review of proposals under the Finance Bill 2026.
The Senate Standing Committee on Finance, chaired by Senator Saleem Mandviwalla, endorsed the mechanism for bringing social media earnings into the tax net. Finance Minister Muhammad Aurangzeb and Federal Board of Revenue Chairman Rashid Mahmood Langrial briefed the committee on the bill’s provisions.
Under the approved framework, annual social media income of up to Rs600,000 will remain exempt. Earnings between Rs600,000 and Rs1.2 million will be subject to the five per cent withholding tax. The measure covers platforms including YouTube, Facebook, Instagram and TikTok.
Objections and concerns
The proposal drew objections from at least one committee member. Senator Abdul Qadir argued that young Pakistanis bringing foreign exchange into the country through online work should be allowed to work freely, and the committee approved the proposal by a majority vote despite those reservations.
The FBR chairman told lawmakers that many social media users earn considerable revenue through online activities and should be included within the country’s taxation framework, adding that the government was not stopping social media creators’ income but seeking to collect its fair share.
He said social media earnings should be treated like any other taxable income. FBR officials told the committee that a significant number of individuals are generating income through social media activities, digital content creation, online advertising and related digital platforms.
Budget context
Finance Minister Aurangzeb reiterated the government’s intention to gradually phase out the super tax, saying the policy direction was clear and that efforts would continue each year to reduce the levy before eventually abolishing it.
The proposal forms part of the committee’s recommendations on the Finance Bill 2026 before final consideration by Parliament. It comes as Pakistan seeks to widen its tax base and raise revenue from rapidly growing sectors of the economy, including the digital creator economy. The government presented the federal budget for FY2026-27 in the National Assembly on June 12.
Sources & reporting notes
This is a summary of published reporting, not independent reporting. Details are as carried by the cited sources, which were reviewed on 2026-06-16.
- Dawn — "Budget 2026-27: Senate panel backs 5pc tax on earnings from social media"16 June 2026 · The committee approval, the Rs600,000 exemption, the Rs600,000–Rs1.2 million band, the FBR chairman's remarks and the finance minister's comments on the super tax.
- TechJuice — "Senate Panel Approves 5% Withholding Tax on Social Media Income"15 June 2026 · The platform list, the exemption band and the committee's clause-by-clause review of the Finance Bill 2026.
