Business Recorder
ISLAMABAD: The Federal Board of Revenue (FBR) will impose tax on social media account holders outside Pakistan (non-residents) with over 50,000 users in Pakistan (subscribers / followers) per tax year or 12,250 in three months, to bring social media earnings including platforms like YouTube and other monetized digital channels under tax regime. In this regard, the Federal Board of Revenue (FBR) has issued draft amendments through which if confirmed, would mean that non-resident persons that have more than 50,000 subscribers or followers in a tax year in Pakistan or more than 12,250 subscribers / followers in a quarter on social media shall have significance economic presence in Pakistan in terms of Section 101(3B)(b). This means their income to the extent it is generated by interaction with Pakistani users shall be Pakistan source income. These draft amendments may also apply to non-resident persons with lesser followers but that have a higher reach / view count than 50,000 views per post or video in Pakistan in a tax year or more than 12,250 views in a quarter, a tax expert explained. The FBR has made it mandatory for both resident and non-resident persons, deriving income from interaction with users in Pakistan through social media platforms, to pay quarterly advance tax and also file special income tax return. In this connection, the FBR has issued SRO.545(i)/2026 and in case of local Pakistanis, the FBR has issued an SRO.546(I)/2026 here on Thursday. The Federal Board of Revenue (FBR) Thursday issued special procedure for taxation of persons earning income from remunerative social media content. The “Revenue per mille” means the revenue generated per 1000 views on the video shared on Youtube. For the purpose of this Special Procedure, it shall be taken as Rs 195 and is subject to revision from time to time, FBR added. A tax expert clarified that the FBR assumes that a YouTuber earns about Rs. 195 for every 1,000 views on their videos. This estimate is used as a benchmark to calculate taxable income, especially if exact earnings are not available. The rate can change in the future if the FBR updates its formula. This helps the tax authority determine how much income to include when calculating taxes on YouTube earnings. Under the new regulations, every non-resident person deriving income from interaction with users in Pakistan through social media platforms to the extent such income constitutes Pakistan-source income. The FBR’s rules shall apply for the purpose of section 99C of the Income Tax Ordinance. 2001 to provide special procedure for computation of income of non-resident persons earning income from remunerative social media content. The FBR has also specified procedure for calculation of Income from remunerative Social Media Content. The minimum income of a person from remunerative social media content shall be calculated as per the prescribed formula. The threshold for number of users shall be number of users to qualify for “Systemic and Continuous Soliciting of Business Activities or Engaging in Interaction through Digital Means” would be exceeding 50,000 users during a tax year or twelve thousand two hundred and fifty users during a quarter. This may include persons with more than 50,000 subscribers or followers, and persons with lesser followers / subscribers but with greater engagement count with the viewers. Every person under this special procedure shall pay advance income tax calculated by applying the procedure given in rule -l9M and rule-19N above for one quarter and shall be payable or recoverable as the case may be. The declaration of such income shall be made in a special part of Income Tax Return for each tax year. Where the declaration of income is less than the amount calculated in rule -19M and rule-19N, the relevant commissioner may rectify this error omission or commission in the return and proceed to recover the amount due from the taxpayer as per the provisions of the income Tax Ordinance, 2001. In case of local Pakistanis, the FBR has issued an SRO.546(I)/2026 here on Thursday to notify special procedure for taxation of persons earning income from remunerative social media content. The Federal Board of Revenue (FBR) new taxation procedure will be applicable on every resident person deriving income from interaction with users in Pakistan through social media platforms. The “Social media platform” means an internet-based service whose primary purpose is to enable users to interact with other users and share user-generated content, where the economic value of the service arises from user participation, network effects and the monetization of user engagement or user data. Revenue per mille” means the revenue generated per 1000 views on the video shared on Youtube. For the purpose of this Special Procedure. it shall be taken as PKR 195 and is subject to revision from time to time. According to the new regulations, the rules shall apply for the purpose of section 99C of the Income Tax Ordinance 2001 to provide special procedure for computation of income of resident persons earning income from remunerative social media content. Every person under this special procedure shall pay advance income tax calculated by applying the procedure given in rule-l3ZK and rule-132L above for one quarter and shall be payable or recoverable, as the case may be. as per provisions of section 147 of the Income Tax Ordinance. 2001. The declaration of such income shall be made in a special part of Income Tax Return for each tax year. Where the declaration of Income is less than the amount calculated in rule- l3ZK and rule-132L, the relevant commissioner may rectify this error of omission or commission in the return and proceed to recover the amount due from the taxpayer as per the provisions of the Income Tax Ordinance. 2001, FBR added. Copyright Business Recorder, 2026
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