The Senate Standing Committee on Finance and Revenue has approved a proposal to impose a 5% withholding tax on income earned through social media platforms as part of deliberations on the Finance Bill 2026–27.

The meeting was chaired by Senator Saleem Mandviwalla, where members conducted a clause-by-clause review of the Income Tax Ordinance 2001. Minister of State for Finance Bilal Azhar Kayani and Federal Board of Revenue (FBR) officials briefed the committee on proposed tax and fiscal reforms.

FBR Chairman Rashid Mahmood Langrial told lawmakers that a growing number of individuals are earning significant income through social media platforms, and the government intends to bring such earnings into the tax net through the proposed mechanism. Following the briefing, the committee approved the 5% withholding tax on specified categories of social media income.

Several members raised concerns over the impact of the measure on content creators and digital entrepreneurs. Senator Saleem Mandviwalla noted that social media has become a legitimate source of income for many people and cautioned against policies that could discourage growth in the digital sector.

Senator Abdul Qadir also questioned the rationale behind taxing such earnings, arguing that the government should instead encourage digital activity that brings in foreign exchange and supports online entrepreneurship.

Under the approved framework, annual social media income up to Rs600,000 will remain exempt from tax, while earnings between Rs600,000 and Rs1.2 million will be subject to a 5% withholding tax.

The proposal is part of broader efforts to expand Pakistan’s tax base and regulate income generated through the rapidly growing digital economy under the Finance Bill 2026–27.