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 as part of its review of the Finance Bill 2026–27.
The meeting under Senator Saleem Mandviwalla reviewed the Income Tax Ordinance 2001 clause by clause. Minister of State for Finance Bilal Azhar Kayani and Federal Board of Revenue (FBR) officials briefed members on various tax and fiscal reforms.
During the session, FBR Chairman Rashid Mahmood Langrial informed the committee that a growing number of individuals are generating substantial income through social media activities. He said the government aims to collect its share of these earnings through the proposed tax mechanism.
According to the FBR chairman, annual social media income up to Rs. 600,000 will remain exempt from tax. Earnings between Rs. 600,000 and Rs. 1.2 million will be subject to a 5 percent withholding tax under the approved plan.
The committee subsequently approved the recommendation to levy a 5 percent withholding tax on certain categories of social media income.
Committee members raised concerns over the potential impact of the measure on digital entrepreneurs and content creators. Senator Saleem Mandviwalla noted that many people are earning through social media and should be allowed to benefit from the sector, suggesting that the move is largely driven by revenue considerations amid the rapid growth of the digital economy.
Senator Abdul Qadir also questioned the rationale for taxing social media income, arguing that foreign exchange inflows should be encouraged. He urged policymakers to support individuals generating economic activity through online platforms rather than imposing additional burdens.
Despite these reservations, the committee proceeded with the approval of the proposal.
