The Federal Board of Revenue (FBR), the institution responsible for enforcing tax policies and collecting taxes in Pakistan, has issued new rules regarding the income and tax calculation for social media influencers, including foreigners residing in Pakistan.
According to the notifications issued by the FBR on September 23, individuals earning income through social media have been brought into the tax net under Section 99 of the Income Tax Ordinance. Under the new rules, to determine income from social media content for any financial year, a maximum deduction of up to 30 percent of expenses from the total payment is allowed.
Method of Income Calculation & RPM Rate
Talking to journalist Tanveer Malik, an FBR spokesperson explained that under the new rules, "Income will be determined on the basis of the higher amount between two figures: either the number of views multiplied by the government prescribed rate of 195 rupees per thousand views (RPM - Revenue Per Mille), or the actual amount received in cash, goods, or services." RPM refers to the total revenue earned for every one thousand views of a video shared on YouTube.
The spokesperson stated that the number of views is publicly available and can be independently verified. Therefore, the income declared by the creator cannot be less than this prescribed limit, unless they present proof of lower income to the commissioner.
Payments received from sponsors in the form of goods, travel facilities, or services will also be included as income according to their fair market value under Section 18(1)(d) of the Income Tax Ordinance. Furthermore, quarterly advance income tax payments are now mandatory for every person falling within this procedure.
Regulations for Non-Residents (Chapter 5A)
The tax collection authority has also issued a notification for non-residents, adding a separate Chapter 5A (VA) to the Income Tax Rules. Non-residents include foreign nationals as well as overseas Pakistanis who earn income through social media platforms by interacting with users present in Pakistan.
The FBR has set a threshold for "the systematic and continuous promotion of business activities or interaction with users through digital means." Specifically, anyone with more than 50,000 users during one tax year or more than 12,250 users in any single quarter falls under this scope if:
- The contract related to such transactions or activities was concluded or signed in Pakistan;
- The non-resident's residence or place of business is in Pakistan; or
- The non-resident provides services in Pakistan.
Coverage of Other Platforms & Industry Concerns
Although the notification specifically benchmarks YouTube due to measurable per-view data, the FBR spokesperson clarified that the rules cover income earned from all social media platforms (including Facebook, Instagram, and TikTok) and all forms of remuneration.
| Feature | FBR Policy Guidelines | Industry Reality / Criticisms |
|---|---|---|
| RPM Benchmark | 195 PKR per 1,000 views (~$0.70 USD) | Industry experts note actual Pakistani audience RPM is significantly lower (~$0.06 USD). |
| Verification | Public view counts used as baseline | Dashboards are private; tracking daily creator views poses logistical challenges. |
| Withholding Tax | Mandatory quarterly advance tax | Banking channels already deduct 5% (filers) to 10% (non-filers) on incoming international transfers. |
The Scale of YouTube in Pakistan
Video-sharing platform YouTube is a major economic driver for local creators. According to Google Pakistan reports, there are 1,000 channels with over one million subscribers, 13,000 channels with more than 100,000 subscribers, and 95,000 channels exceeding 10,000 subscribers. Google Country Director Farhan Qureshi previously highlighted that Pakistani creators command massive global audiences, though regional monetization payout rates fluctuate drastically.