ISLAMABAD: The Federal Board of Revenue (FBR) has proposed taxing non-resident social media account holders who have a significant user base in Pakistan, aiming to bring earnings from platforms such as YouTube and other monetised digital channels into the tax net.
Under draft amendments issued by the FBR, non-resident individuals with more than 50,000 subscribers or followers in Pakistan during a tax year—or over 12,250 in a quarter—will be considered to have a significant economic presence in the country under Section 101(3B)(b). As a result, income generated through interaction with Pakistani users will be treated as Pakistan-source income.
The proposed rules may also apply to individuals with fewer followers but higher engagement, such as those exceeding 50,000 views per post or video annually, or 12,250 views in a quarter, according to a tax expert.
The FBR has made it mandatory for both resident and non-resident individuals earning income from Pakistani users via social media platforms to pay quarterly advance tax and file a special income tax return.
In this regard, the FBR issued SRO.545(I)/2026 for non-residents and SRO.546(I)/2026 for resident individuals, outlining a special procedure for taxing income from remunerative social media content.
The concept of “Revenue per mille” (RPM)—defined as earnings per 1,000 views—has been set at Rs195 for calculation purposes, though it may be revised over time. This benchmark will be used to estimate taxable income where actual earnings data is unavailable.
A tax expert explained that the FBR assumes a YouTuber earns approximately Rs195 per 1,000 views, which serves as a baseline for tax calculations.
The new rules fall under Section 99C of the Income Tax Ordinance, 2001, providing a framework for computing income of individuals earning through digital platforms.
The threshold for qualifying as engaging in “systematic and continuous business activities” through digital means is set at more than 50,000 users annually or 12,250 quarterly, including cases with high engagement despite lower subscriber counts.
Individuals covered under this regime will be required to pay advance income tax on a quarterly basis, calculated using prescribed formulas, and declare their income in a dedicated section of their annual tax returns.
If declared income is lower than the amount calculated under the prescribed rules, tax authorities may revise the return and recover outstanding dues in accordance with the Income Tax Ordinance, 2001.
For resident individuals, similar procedures apply under SRO.546(I)/2026, covering income derived from interaction with users in Pakistan through social media platforms.
The FBR defined a “social media platform” as an internet-based service that enables user interaction and content sharing, where economic value is derived from user engagement, network effects, and monetisation of user data.
The new taxation framework aims to formalise and regulate income generated from digital content, ensuring that both local and foreign earners contribute to the national tax system.
