Pakistan Plans Tax on Overseas YouTubers Targeting Local Viewers
By Tanveer Ahmed :
Pakistan’s tax authorities have proposed new rules aimed at taxing overseas YouTubers who generate income from viewers in the country, introducing a mechanism that would charge Rs195 for every 1,000 views on videos watched in Pakistan.
The Federal Board of Revenue (FBR) has put forward amendments to the Income Tax Rules and invited objections within seven days. The proposed changes were issued using special powers available to Finance Minister Muhammad Aurangzeb to introduce sector-specific tax procedures.
Under the proposal, the levy would apply to non-resident individuals who earn money from social media content viewed in Pakistan. The FBR says the measure is designed to capture income generated through interaction with Pakistani users on digital platforms.
According to the draft rules, the Rs195 charge would apply per 1,000 views on YouTube videos viewed in Pakistan, although the rate could be revised periodically. The proposal suggests that such a levy could translate into an effective tax rate ranging from around 16% to 66%, depending on earnings.
Industry estimates show that revenue per thousand views on YouTube typically ranges between $1 and $3, though it can reach as high as $9 when most viewers are based in higher-value markets such as the United States or Canada. Analysts say enforcing the proposed tax may require cooperation from YouTube itself.
The new procedure would target non-resident Pakistanis producing digital content abroad particularly those based in countries such as the United States, Canada and the United Kingdom whose videos about Pakistan’s politics, economy or social issues attract audiences inside the country.
Officials say the rules would only apply to creators who maintain a significant digital presence in Pakistan. The proposed threshold would cover those with more than 50,000 users in a tax year or at least 12,250 users in a quarter.
The FBR has outlined a formula to determine taxable income from such content. Income would be calculated by taking total earnings from social media activity and deducting expenses, capped at 30% of total revenue.
In addition, the rules state that total remuneration from online content would be determined by comparing two figures: the estimated revenue calculated using the per-view formula, or the actual earnings received by the creator. The higher amount would be used for tax purposes.
Creators falling under the proposed regime would also be required to pay advance income tax and declare their digital income in a dedicated section of their annual tax return.
The FBR said that if a creator reports income lower than the amount calculated under the formula, the relevant Inland Revenue Commissioner would have the authority to correct the return and recover the due tax under the provisions of the Income Tax Ordinance 2001.
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