Senate panel endorses 5% tax on social media earnings of content creators

The Senate Standing Committee on Finance on Monday approved a proposed 5% tax on income earned through social media platforms by local and foreign digital content creators.

The committee, chaired by Senator Saleem Mandviwalla, endorsed the taxation mechanism while reviewing proposals included in the Finance Bill 2026.

Under the proposed framework, earnings generated by content creators, influencers and online entrepreneurs through platform monetisation, advertising revenue and other digital activities would be brought into the tax net.

Finance Minister Muhammad Aurangzeb and Federal Board of Revenue Chairman Rashid Mahmood Langrial briefed the committee on the proposed measure and other provisions of the Finance Bill.

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The measure is contained in the newly proposed Section 154B of the Finance Bill 2026, which separates earnings from global social media platforms from income generated through traditional information technology and software exports.

Banks and non-banking financial institutions would be required to deduct 5% tax from inward remittances or account credits originating from social media platforms such as YouTube, Facebook, Instagram and TikTok.

For resident creators included on the Active Taxpayers List, the 5% deduction would be treated as minimum tax.

For non-resident creators, the deduction would constitute final tax.

Social media earnings were previously treated under the concessionary framework available to information technology and software exporters.

While the Finance Bill proposes extending the 0.25% final tax regime for eligible information technology and software exporters until Tax Year 2029, digital content creators and social media influencers have been excluded from the concession.

The proposal will form part of the committee’s recommendations on the Finance Bill before it is taken up by Parliament.