Pakistan’s Federal Board of Revenue (FBR) has introduced a new procedure for taxing income earned from remunerative social media content, applying a 5% tax rate to resident and non-resident individuals who earn Pakistan-sourced income through interaction with users in the country, per Gulf News.
The rules, issued through SRO 1641(I)/2026 and SRO 1642(I)/2026 under the Income Tax Ordinance, 2001, bring global social media earnings tied to Pakistani audiences into the country’s tax net.
The procedure applies to anyone engaged in what the FBR describes as systemic and continuous solicitation of business activity or engagement through digital means, once they cross one of two thresholds: more than 50,000 users during a tax year, or more than 12,250 users during a quarter.
How the Tax Is Calculated
Taxable income for a tax year is determined by deducting allowable expenses, capped at 30% of total revenue, from total remuneration. Total remuneration is set as whichever figure is higher: actual remuneration received from the content, or income calculated using the FBR’s prescribed revenue-per-mille (RPM) formula.
For YouTube, the FBR has fixed the RPM at Rs195 (~$0.7) per 1,000 video views, a rate it says it can revise over time. A taxpayer who believes actual earnings fall below the RPM-calculated figure must submit evidence to the Commissioner to establish the lower amount.
Filing Obligations
Those covered by the rules must pay quarterly advance income tax under Section 147 of the Income Tax Ordinance and declare the income in a dedicated section of their annual tax return. If declared income comes in below the amount calculated under the prescribed procedure, the relevant Commissioner can rectify the return and recover the difference. All other provisions of the Income Tax Ordinance, 2001 continue to apply where the new procedure does not specifically address them.
The RPM-based approach ties tax liability to view counts alongside disclosed revenue, a method that mirrors how third parties already estimate creator earnings on the platform.
Research published by Kapwing in late 2025 used a comparable revenue-per-view model to estimate annual ad income for high-performing YouTube Shorts channels. That research also found Pakistan carrying considerable weight in the channel landscape the new rules now target: the country had 20 AI-generated “slop” channels among its top 100 trending channels, more than any other country Kapwing analyzed, and its trending AI-slop channels had accumulated 5.34 billion views, the second-highest total behind South Korea.
Under the FBR’s new framework, income from channels like these, whether run by Pakistan-based creators or non-resident accounts drawing Pakistani viewership, could be assessed using the same view-driven logic.
Dragomir is a Serbian freelance blog writer and translator. He is passionate about covering insightful stories and exploring topics such as influencer marketing, the creator economy, technology, business, and cyber fraud.
Pakistan’s Federal Board of Revenue (FBR) has introduced a new procedure for taxing income earned from remunerative social media content, applying a 5% tax rate to resident and non-resident individuals who earn Pakistan-sourced income through interaction with users in the country, per Gulf News.
The rules, issued through SRO 1641(I)/2026 and SRO 1642(I)/2026 under the Income Tax Ordinance, 2001, bring global social media earnings tied to Pakistani audiences into the country’s tax net.
The procedure applies to anyone engaged in what the FBR describes as systemic and continuous solicitation of business activity or engagement through digital means, once they cross one of two thresholds: more than 50,000 users during a tax year, or more than 12,250 users during a quarter.
How the Tax Is Calculated
Taxable income for a tax year is determined by deducting allowable expenses, capped at 30% of total revenue, from total remuneration. Total remuneration is set as whichever figure is higher: actual remuneration received from the content, or income calculated using the FBR’s prescribed revenue-per-mille (RPM) formula.
For YouTube, the FBR has fixed the RPM at Rs195 (~$0.7) per 1,000 video views, a rate it says it can revise over time. A taxpayer who believes actual earnings fall below the RPM-calculated figure must submit evidence to the Commissioner to establish the lower amount.
Filing Obligations
Those covered by the rules must pay quarterly advance income tax under Section 147 of the Income Tax Ordinance and declare the income in a dedicated section of their annual tax return. If declared income comes in below the amount calculated under the prescribed procedure, the relevant Commissioner can rectify the return and recover the difference. All other provisions of the Income Tax Ordinance, 2001 continue to apply where the new procedure does not specifically address them.
The RPM-based approach ties tax liability to view counts alongside disclosed revenue, a method that mirrors how third parties already estimate creator earnings on the platform.
Research published by Kapwing in late 2025 used a comparable revenue-per-view model to estimate annual ad income for high-performing YouTube Shorts channels. That research also found Pakistan carrying considerable weight in the channel landscape the new rules now target: the country had 20 AI-generated “slop” channels among its top 100 trending channels, more than any other country Kapwing analyzed, and its trending AI-slop channels had accumulated 5.34 billion views, the second-highest total behind South Korea.
Under the FBR’s new framework, income from channels like these, whether run by Pakistan-based creators or non-resident accounts drawing Pakistani viewership, could be assessed using the same view-driven logic.
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