Pakistan’s Federal Board of Revenue has set an earnings benchmark of Rs195 ($0.71) per 1,000 YouTube views for taxing monetized content. The mechanism also counts gifts and free products received in exchange for posts. The figure estimates earnings, rather than the tax payable. Existing Income Tax Ordinance provisions determine the applicable tax. The September 23 notification follows draft rules issued in April. It allows expense deductions up to 30 percent of revenue. FBR’s resident procedure, SRO 1641(I)/2026, also permits revisions to the benchmark. An FBR official told Arab News on Tuesday that views alone would not trigger the estimate. Content must generate income. “Once it is clear that the content is monetized, the formula multiplies Rs195 by the ‘total number of views in 1000s’,” the official said. Read More: FBR to Start Deducting 5% Tax From Social Media Revenue The official requested anonymity because he lacked authorization to speak to the media. Explaining the benchmark, he said: “This figure of PKR195 was used because our research and interactions with people making monetized content in Pakistan lead us to this figure. This is the below average amount normal Pakistani content fetches per 1000 views on YouTube across different types of content and different types of content creators.” Lower earnings require evidence The procedure uses whichever is higher: the view-based estimate or actual remuneration, including payments in kind. Creators on other platforms would declare their total remuneration for the relevant period. However, creators can challenge an estimate exceeding their earnings. “If a person is of the view that the total remuneration received is less than the threshold prescribed… the person is required to demonstrate evidence to this effect to the satisfaction of the Commissioner,” the notification read, according to Arab News. Evidence can include platform revenue reports, payout statements matching bank credits, withholding certificates, and sponsorship or goods-related contracts and invoices. “The tax commissioner can also ask a creator to provide access to their social media dashboard under relevant legal provisions,” the official said. Gifts count as income “Payment in kind counts,” he said. Free products or gifts supplied in return for content can therefore make a post “paid.” Creators should retain monetization-off or zero-earnings reports, payout statements and bank records to establish that posts earned nothing. Records should also demonstrate the absence of sponsorships, brand deals or gifted products. Quarterly payments and audience thresholds Creators must pay quarterly advance income tax and separately declare earnings in their annual returns. Commissioners can correct under-declarations and recover outstanding amounts. Read More: New FBR Rule Hits Digital Creators With 5% to 10% Tax The resident procedure covers income from interactions with users in Pakistan. It sets no minimum audience threshold, the official said. “Non-residents are covered only above 50,000 users in Pakistan in a tax year, or 12,250 in a quarter,” he added. Business Recorder separately reported that SRO 1642(I)/2026 governs qualifying non-residents’ Pakistan-source income from user interactions. This distinguishes their procedure from the resident rules.
Pakistan Moves to Bring Online Earnings Into Formal Tax System
The federal government has proposed a 5 percent withholding tax on income earned by social media influencers, YouTubers, TikTok creators and other digital content producers under the Finance Bill 2026. The move aims to bring Pakistan’s fast-growing creator economy into the formal tax system. Officials also want to improve documentation of online earnings. Under the proposal, banks and financial institutions will deduct the tax when digital platforms transfer payments to creators’ accounts. The tax will cover earnings from YouTube, Facebook, Instagram, TikTok and other similar platforms. If parliament approves the proposal, creators will receive payments after banks deduct the tax. The government has included both resident and non-resident creators in the proposed framework. However, authorities may apply different rules based on a person’s tax status. Officials say the measure will help authorities document online earnings more effectively and improve compliance. Online Earnings Come Under Greater Scrutiny Pakistan’s creator economy has expanded rapidly in recent years. Thousands of people now earn money through advertising revenue, sponsorship deals, affiliate marketing and brand partnerships. YouTube remains one of the biggest sources of income for content creators. Meanwhile, TikTok, Instagram and Facebook continue expanding monetisation opportunities. The Federal Board of Revenue has increased its focus on digital transactions as more economic activity moves online. Officials believe the proposal will create a level playing field between digital creators and traditional businesses. They also argue that creators who generate significant income should contribute to the tax system like other professionals and companies. Many countries have introduced similar measures as governments seek to modernise tax systems and capture revenue from digital economies. Banks to Play Central Role The proposed framework places banks at the centre of the collection process. Instead of requiring separate deductions by digital platforms, banks will collect the tax when creators receive payments. Officials expect this approach to simplify compliance and improve transparency. The government also wants to track payments arriving from foreign platforms more effectively. Tax experts note that withholding taxes often function as advance tax payments. Depending on tax laws and filing status, taxpayers can adjust those payments against their final tax liability. The proposal marks one of Pakistan’s most significant efforts to regulate digital income. Officials believe the measure will strengthen revenue collection while creating a clearer regulatory framework for online creators. If lawmakers approve the proposal, Pakistan will formally integrate social media earnings into its mainstream taxation system and expand oversight of the country’s growing digital economy.
