Web Desk: Tax authority FBR has introduced a new mechanism for estimating income from monetised social media content, setting a benchmark of Rs195 ($0.70) for every 1,000 YouTube views, as the government moves to bring the country’s expanding creator economy into the formal tax system.
The Federal Board of Revenue (FBR) has also allowed social media creators to claim expenses of up to 30% of their revenue under the new framework, while free products and other non-cash benefits received in exchange for content can also be treated as taxable remuneration.
The mechanism applies specifically to social media content that generates income rather than posts that simply attract large audiences.
Under the FBR’s procedure, income from YouTube can be estimated by multiplying Rs195 by the total number of views expressed in thousands. For other platforms, creators must report the remuneration they actually receive because payment systems may differ and may not depend directly on view counts.
The tax authority introduced the procedure through a notification issued on Sept. 23, following an earlier regulatory framework announced in April for individuals earning from social media activities.
An FBR official said the Rs195 benchmark was based on research and consultations with Pakistani creators and represented a below-average earning level for monetised YouTube content across different categories.
The benchmark does not automatically override a creator’s actual earnings.
If a creator can establish that the remuneration received was lower than the prescribed benchmark, the FBR can consider evidence supporting the claim. Such evidence could include platform earnings reports, payment records linked to bank transactions, withholding certificates and sponsorship agreements or invoices.
Tax officials may also seek access to relevant social media dashboards where permitted under existing law.
As a result, a creator whose content attracts views but has no monetisation, sponsorship or other form of remuneration would not be subject to the estimated income based solely on those views.
The rules also cover non-cash benefits.
Products, gifts or other goods provided to a creator in exchange for producing content can be treated as remuneration, even when the creator receives no direct cash payment.
Creators seeking to establish that a post was genuinely unpaid would need to maintain supporting records, including platform reports showing that monetisation was disabled or generated no earnings, bank statements and evidence that no sponsorship, commercial agreement or promotional product was involved.
The procedure does not introduce a separate tax rate for social media earnings. Instead, the income remains subject to the applicable provisions of Pakistan’s Income Tax Ordinance.
The new system also requires creators to account for advance income tax on a quarterly basis.
Social media earnings must be reported in a designated section of the annual income tax return. If the declared amount falls below the income calculated under the prescribed mechanism, the relevant tax commissioner can review and amend the return and recover any resulting shortfall.
The framework therefore gives the FBR a mechanism to compare declared creator income with estimated earnings based on views or documented remuneration.
The procedure applies to resident individuals earning remuneration from social media activity involving users in Pakistan.
According to the FBR official, resident creators fall within the framework regardless of the size of their audience. Non-resident creators face separate thresholds under the applicable rules.
For non-residents, the threshold is more than 50,000 users in Pakistan during a tax year or 12,250 users in a quarter.
The new framework marks a significant step in Pakistan’s efforts to bring digital earnings into the tax net as content creation, influencer marketing and platform-based income continue to expand.
Read more: Pakistan shines in Türkiye as NUST team takes 3rd place globally
