Pakistan’s Federal Board of Revenue has introduced a fixed charge of Rs 195 per 1,000 views on non-resident YouTubers, which a report describes as punitive rather than progressive. This new tax framework has raised concerns about uncertainty and potential over-taxation for creators, according to Nepal Aaja’s report.
The flat levy imposed on influencers and digital creators earning from Pakistani audiences overlooks the varying effective tax rates due to differences in YouTube monetization based on geography, content type, and advertiser demand. Creators engaging with over 50,000 Pakistani users annually or 12,250 in a quarter would be subject to quarterly advance tax under the draft rules.
The report highlights that this rule considers audience engagement as taxable revenue irrespective of creators’ actual earnings, potentially burdening them with tax rates ranging from 16% to 66% of their earnings. It also questions the administrative feasibility of enforcing the tax, requiring coordination with platforms like YouTube for data access and compliance monitoring.
According to the report, the new tax policy in Pakistan is criticized for prioritizing immediate revenue gains over fairness, efficiency, and sustainability. By focusing on digital views for tax collection, the government is seen as sidestepping broader structural tax reforms to expand the tax base, similar to its historical reliance on petroleum levies for revenue.
Pakistan’s approach to taxing non-resident creators has raised concerns about equity in taxation, especially as traditional sectors like wholesale and retail trade, which significantly contribute to the GDP, continue to generate minimal tax revenue.
