The National Assembly Standing Committee on Finance has approved a proposal to impose a five percent withholding tax on income earned through social media platforms, while also endorsing tax exemptions for Pakistan International Airlines (PIA) on aircraft and spare parts imports.

The committee, chaired by Syed Naveed Qamar, was informed by Federal Board of Revenue (FBR) officials that annual earnings from social media activities in Pakistan currently exceed Rs10 billion.

Officials told lawmakers that withholding tax would be deducted when earnings from platforms such as YouTube are remitted to local bank accounts. The committee approved the proposal as part of the ongoing budget review process.

The panel also approved a proposal to abolish the one per cent advance tax on exporters.

During the meeting, lawmakers reviewed tax incentives linked to PIA’s privatisation process.

Officials from the Privatisation Commission informed the committee that all four bidders had sought tax exemptions on specific items.

According to the commission, tax exemptions on nine categories of aircraft and aviation-related imports would remain in place for 15 years under the privatisation agreement.

Officials warned that reversing the exemptions could jeopardise the PIA transaction, adding that the International Monetary Fund (IMF) had agreed to the arrangement after extensive negotiations.

The committee also approved a four per cent tax on profits withdrawn from life insurance policies before four years.

Meanwhile, a proposal to remove sales tax on stationery items failed to secure approval due to opposition from the Ministry of Finance and the FBR.