Digital artists, content creators, and influencers have called on the government to review the taxation regime applicable to their earnings, arguing that a more balanced tax framework could encourage digital entrepreneurship, attract foreign exchange, and create opportunities for emerging talent. They said earnings from social media platforms depend on several factors beyond views and subscriber numbers, including audience location, advertising demand, platform policies, production costs, and the nature of the content, maintaining that taxation based primarily on gross receipts could place a disproportionate burden on creators, particularly those operating with high production costs or irregular income.
The Federal Board of Revenue (FBR) introduced the withholding tax regime on revenues received by digital content creators and social media influencers from platforms including YouTube, Facebook, Instagram, and TikTok through Section 154B of the Income Tax Ordinance, 2001, effective July 1, 2026. Under the regime, banks and non-banking financial institutions deduct 5 percent withholding tax from creators on the Active Taxpayers List, with non-filers facing a 10 percent rate, and the deducted amount treated as minimum tax for residents and final tax for non-residents. FBR later notified separate implementation rules through SRO 642(I)/2026 and SRO 1641(I)/2026, setting a minimum revenue benchmark of Rs195 for every 1,000 YouTube video views and allowing taxpayers to claim expenses of up to 30 percent of total revenue, while also excluding social media income from the reduced 0.25 percent Final Tax Regime available to general IT and software exporters.
Sher Muhammad, a Pakistani music-industry entrepreneur known as Sher Khumber, said taxation should not become a barrier to the growth of the country’s content-creation industry, particularly for artists seeking to build audiences and monetise their work through international digital platforms. He said the emergence of artificial intelligence was already creating new challenges for the revenue streams of Pakistani artists in the absence of comprehensive digital-rights protection, and that additional taxation could further squeeze creator earnings even as Pakistani cultural content, including poetry and music, continues gaining international appreciation through social media. He urged authorities to adopt a more supportive tax framework that recognises production costs, arguing lower taxes would help artists establish digital studios to promote local culture through social platforms.
Dr Noman Ahmed Said, CEO of SI Global Solutions, said content creators should contribute to Pakistan’s tax base, but argued the system should recognise production costs and irregular income patterns, since withholding tax on platform receipts can be substantial for creators operating on thin margins. He specifically called for reconsideration of the 30 percent expense ceiling contained in FBR’s special procedure for taxing social media content, cautioning that an excessive tax burden could affect investment, employment, and foreign-exchange earnings from the digital economy. He added that neither the revenue gain nor the potential economic loss from the current regime can be responsibly quantified without reliable sector data, and called on FBR to consult creators and publish an impact assessment. The push for concessions comes as FBR continues expanding its digital income enforcement more broadly, including through a Lifestyle Monitoring Cell that uses artificial intelligence and social-media intelligence to flag discrepancies between publicly observable lifestyles and declared income and assets.
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