Removal of Section 236CA signals a major policy shift, raising concerns over the future competitiveness of Pakistan’s domestic media and entertainment industry
KARACHI: The Federal Board of Revenue (FBR) has proposed abolishing the advance tax imposed on foreign-produced television plays and advertisements featuring foreign actors, a move that industry stakeholders fear could place Pakistan’s local showbiz sector under increased pressure.
Through the Finance Bill, 2026, the FBR has proposed the omission of Section 236CA of the Income Tax Ordinance, 2001, effectively ending a tax measure that was introduced to support and protect the domestic media industry.
What was Section 236CA?
Section 236CA was introduced through the Finance (Supplementary) Act, 2022, which came into effect in January 2022. The provision aimed to encourage local content production by imposing advance tax on foreign-produced television dramas, dubbed programmes and advertisements featuring foreign actors.
At the time of its introduction, the FBR stated:
“In order to encourage domestic media industry, advance tax on foreign produced TV drama serials or plays dubbed in Urdu or any other language shown on local television channels has been introduced through insertion of Section 236CA in the Ordinance. Additionally, advance tax shall also be applicable on advertisement starring foreign actors. Tax collected under this section shall be minimum tax.”
The tax was designed to make imported television content and foreign celebrity endorsements less attractive compared to locally produced alternatives, thereby supporting Pakistani artists, actors, producers and production houses.
Advance Tax Rates Under Section 236CA
Before its proposed abolition, the following rates of advance tax were applicable under Section 236CA:
| Description | Rate of Tax |
| Foreign-produced TV drama serial or play | Rs1,000,000 per episode |
| Foreign-produced TV play (single episode) | Rs3,000,000 |
| Advertisement starring a foreign actor | Rs100,000 per second |
Policy Reversal Raises Industry Concerns
The proposed removal of Section 236CA represents a significant shift in FBR policy. Industry observers note that the tax was originally introduced to provide a level playing field for local content creators by discouraging excessive reliance on imported television programmes and foreign talent.
With the tax now set to be abolished, broadcasters may find foreign-produced content and advertisements more financially attractive. Critics argue that this could increase competition for local artists and production companies, potentially affecting employment opportunities and investment in Pakistan’s entertainment sector.
Impact on the Entertainment Sector
The elimination of advance tax on foreign TV plays and advertisements is expected to reduce costs for television channels and advertisers that rely on imported content or international celebrities. However, the move may also intensify challenges for Pakistan’s showbiz industry, which continues to compete with foreign productions for audience attention and advertising revenue.
As the Finance Bill, 2026 progresses through the legislative process, stakeholders from the media and entertainment sectors are likely to closely monitor the implications of the proposed policy change on the future of local content production.
