The Federal Board of Revenue (FBR) is preparing to bring TikTok content creators and other digital influencers under the tax net, as Pakistan seeks to modernize its revenue system and meet growing fiscal demands.
During a Senate Standing Committee on Finance and Revenue session on Wednesday, Senator Faisal Vawda revealed that FBR was finalizing a framework to tax income earned by TikTokers and other social media influencers. He emphasized that Punjab is expected to generate the largest share of recoverable taxes and urged FBR to begin enforcement in the province.
The proposal comes amid concerns that Pakistan’s tax system has failed to keep pace with the booming digital economy. Many influencers earn millions through advertising, sponsorships, and monetization programs but remain untaxed. With TikTok’s rapid rise as one of the country’s most popular platforms, authorities see this as an untapped source of revenue at a time when the government faces pressure from the International Monetary Fund (IMF) to expand the tax base.
The meeting, chaired by Senator Saleem Mandviwalla, also turned heated as senators criticized the government’s Pakistan Remittances Initiative (PRI), designed to incentivize overseas Pakistanis to send money through formal channels.
Deputy Governor of the State Bank of Pakistan informed the committee that the subsidy on overseas transactions was initially fixed at 20 Saudi riyals per transaction in 2020, increased to 30 riyals in 2024, but later reduced back to 20 riyals.
Senators alleged that commercial banks and money transfer operators were the real beneficiaries of the subsidy rather than expatriate workers or their families. Senator Faisal Vawda described the policy as a “major scandal,” accusing financial institutions of pocketing government funds meant to lower remittance costs.
“The subsidy was supposed to benefit families of overseas workers, but instead, it enriched financial intermediaries,” Vawda said, calling for a full-scale inquiry and urging FBR to recover the allegedly misused funds.
Chairman Mandviwalla echoed these concerns, highlighting that remittance recipients continue to face high transaction charges despite years of subsidies. He demanded a comprehensive report on all expenditures and reversals linked to the PRI over the past four years and recommended reforms to improve transparency and prevent misuse.
Minister of State for Finance and Revenue Bilal Azhar Kayani assured senators that the government would review the program in consultation with the State Bank and relevant stakeholders. He admitted that gaps in implementation had allowed leakages and inefficiencies to persist.
Separately, FBR Chairman briefed the committee on the non-implementation of a Presidential Order issued on July 16, 2025, adding that the matter is currently pending before the Sindh High Court.
Pakistan has fewer than five million active taxpayers out of a population exceeding 240 million. Experts say expanding the tax net to include digital incomes is critical to stabilizing public finances and aligning with global practices. Countries like India and Indonesia already tax social media earnings, and Pakistan is now following suit.
However, analysts warn that tracking digital earnings will be a major challenge, as much of the income is routed through foreign platforms and informal channels. They stress the need for FBR to coordinate with global tech companies and the State Bank to design a system that ensures compliance without discouraging innovation in the country’s growing digital economy.
As Pakistan navigates its IMF program commitments, the twin issues of taxing TikTokers and fixing remittance subsidies reflect broader efforts to plug revenue gaps and rebuild trust in government policies. The Senate committee’s tough stance signals rising political pressure to deliver reforms that are both fair and transparent.
