Karachi, April 17, 2025: The Institute of Cost and Management Accountants of Pakistan (ICMAP) has proposed the introduction of a 3.5% tax on earnings generated from social media platforms, as part of its comprehensive tax proposals for the federal budget 2025–26.
In its latest recommendations, ICMAP suggested that the government consider imposing this tax specifically on content creators and influencers earning over Rs5 million annually through platforms such as YouTube, TikTok, and Instagram. The proposal aims to tap into the rapidly expanding digital creator economy, which is reshaping traditional business models and contributing significantly to the global financial landscape.
ICMAP emphasized that earnings from social media platforms have become a substantial source of income for a growing segment of Pakistan’s youth and entrepreneurs. By taxing high-earning individuals operating on these platforms, the government could ensure equitable participation in the tax net, aligning the digital economy with national fiscal objectives.
Furthermore, ICMAP proposed the inclusion of a digital subscription tax on streaming services like Netflix, Disney+, and Hotstar. The organization noted that these platforms are now deeply embedded in urban lifestyles and entertainment consumption. However, it also recommended exemptions for low-income groups and minors to maintain digital inclusivity and fairness.
“Digital platforms have revolutionized income streams, and it’s time for our taxation systems to evolve accordingly,” ICMAP stated. “By bringing social media and subscription-based earnings into the tax framework, we can ensure that those benefiting from digital wealth also contribute their fair share to national development.”
According to ICMAP’s estimates, taxing this segment could potentially generate an additional Rs52.5 billion in annual revenue — equivalent to approximately 0.06% of Pakistan’s GDP, which stands around $350 billion or Rs87.5 trillion.
This initiative is seen as a viable step toward modernizing tax collection mechanisms, expanding the tax base, and boosting revenues without burdening the salaried class. ICMAP believes that such progressive taxation on digital platforms can also support local public broadcasting initiatives and foster financial discipline among high-income digital entrepreneurs.
As platforms continue to grow in influence, ICMAP’s recommendations mark a forward-looking approach to regulating and benefiting from Pakistan’s digital economy.