Federal Board of Revenue (FBR) has introduced new tax rules. These rules target non-resident social media influencers. The move brings foreign-based earners into Pakistan’s tax system.
FBR Chairman Rashid Mahmood Langrial approved the new framework. It focuses on non-resident Pakistanis earning through social media. Other non-resident individuals also fall under these rules.
5% Tax on Non-Resident Influencers
A 5% tax will apply to non-resident influencer income. This covers earnings from social media activities specifically. FBR designed this rule for people living outside Pakistan.
The framework also addresses income from social media content broadly. This includes earnings influencers generate through digital platforms. FBR aims to tax this growing income source properly.
New YouTube Revenue Benchmark
FBR has set a benchmark for YouTube earnings. The rate is Rs195 per 1,000 video views. This is called revenue per mille, or RPM.
FBR may revise this rate periodically. The benchmark helps calculate taxable income accurately. It applies to influencers using YouTube for income.
Rules for Resident Influencers
Resident influencers get expense deductions too. They can deduct up to 30% of revenue. This reduces their overall taxable income amount.
Total remuneration follows a specific calculation method. Authorities compare the formula-based amount with actual earnings. Whichever amount is higher becomes taxable income.
Cash and in-kind compensation both count. Influencers must report both types accurately. FBR wants complete transparency in earnings disclosure.
Providing Evidence for Lower Earnings
Some influencers may earn less than the RPM benchmark suggests. They must provide proof to tax commissioners. This evidence must satisfy commissioner requirements fully.
Quarterly Advance Tax Requirement
FBR introduced quarterly advance tax payments too. This applies to individuals under the special procedure. Payments follow prescribed income calculation rules.
Reporting and Compliance
Influencers must report social media income separately. This applies to every tax year filing. Under-reporting can trigger commissioner intervention.
Commissioners can correct inaccurate returns when needed. They may also recover unpaid tax liabilities. This ensures compliance with the new framework.
Three New Notifications Issued
FBR issued three notifications for this framework. One notification classified social media earners as a special sector. Another notification set detailed rules for residents.
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The framework also covers non-residents meeting specific criteria. Their earnings must qualify as Pakistan-source income. A user-related threshold determines eligibility under these rules.
