ISLAMABAD (Kashmir English): Pakistan’s Federal Board of Revenue (FBR) has proposed introducing special tax rules for YouTubers and social media influencers, taking a major step towards bringing Pakistan’s fast-growing digital economy under the purview of taxation.
New amendments have been introduced in the Income Tax Rules 2002 , the main objective of which is to collect tax from non-residents who earn profit from social media content.
According to these rules, all such individuals who interact with Pakistani users through internet-based platforms and are getting compensation from them will now be part of the regular tax net.
The FBR has set a specific limit on the number of users to come under the purview of taxation.
Under the new rules, all digital creators who have more than 50,000 users in a tax year or more than 12,250 users in a quarter will be liable to pay tax.
The move is aimed at targeting big influencers who are earning huge income from digital platforms.
To accurately estimate the income, the FBR has also devised a formula under which a rate of Rs 195 has been fixed for every 1,000 views on YouTube videos. Creators have been given the facility to deduct expenses up to a maximum of 30 percent of their total income, after which tax will be calculated on the remaining amount.
A condition has also been laid down for the collection of tax that the actual amount received by the creator or the amount derived from the official formula, whichever is higher, will be used as the basis.
Under these rules, all concerned individuals will have to regularly declare their digital income in a specific section of their annual income tax returns. Moreover, it has been made mandatory for those earning from social media to deposit advance tax on a quarterly basis.
The FBR has clarified that if the income declared by a creator is found to be less than the criteria set by them, the concerned commissioner will have full authority to take legal action to rectify the error and recover the amount due. The FBR has invited suggestions and objections from the public and stakeholders on the draft within seven days.
