The National Assembly’s Standing Committee on Finance on Thursday approved a series of recommendations for the proposed Finance Bill 2026-27, including the imposition of a 5% withholding income tax earned through social media platforms.
Other recommendations included the abolition of a 1% advance tax on exporters and changes to the taxation of inherited properties.
The committee, chaired by Syed Naveed Qamar, resumed its meeting after a lunch break to examine the proposed finance bill for the upcoming fiscal year. During the session, officials of the Federal Board of Revenue (FBR) briefed lawmakers on a range of tax reforms and proposed measures.
Among the key proposals approved was a 5% withholding income tax earned through social media platforms, particularly YouTube.
FBR officials told the committee that the tax would apply when YouTubers and other content creators repatriated their dollar earnings to Pakistan through banking channels. They said income generated through social media platforms had reached around Rs10 billion.
The committee also approved a proposal to abolish the 1% advance tax imposed on exporters, a move seen as providing relief to the export sector.
Lawmakers also considered proposals relating to capital gains tax on inherited properties and plots.
FBR officials said the cost base of inherited property would be determined according to its market value on the date of the original owner’s death. They explained that if a plot was valued at Rs80 million at the time of the owner’s death and was later sold for Rs100m, capital gains tax would apply only to the Rs20m increase in value.
However, Qamar proposed that the cost base should instead be calculated from the date ownership of the property is transferred to the heir. The committee approved the recommendation to determine the cost base from the date of transfer of ownership. It also endorsed a proposal to provide legal protection to inherited properties transferred through family settlement arrangements.
Separately, the committee approved a proposal making the electronic filing of income tax returns mandatory.