Pakistan sets minimum tax benchmark for social media income

Pakistan’s tax authority has introduced a new mechanism for taxing income earned from remunerative social media content, setting a minimum revenue benchmark of PKR 195 ($0.70) for every 1,000 YouTube video views and allowing taxpayers to claim expenses of up to 30% of total revenue.

The Federal Board of Revenue (FBR) notified the rules through S.R.O. 642(I)/2026 and S.R.O. 1641(I)/2026, establishing separate procedures for residents and non-residents earning income through social media platforms.

Under the mechanism, taxable income from remunerative social media content will be determined after deducting allowable expenses from total remuneration. Such expenses will be capped at 30% of total revenue.

The FBR said total remuneration would be based on whichever is higher of two amounts: revenue calculated at the prescribed rate of PKR 195 per 1,000 views, or the actual remuneration received from social media content, whether in cash or in kind.

The PKR 195 revenue-per-mille rate applies to videos shared on YouTube and may be revised periodically, according to the notification.

Taxpayers who believe their actual remuneration is lower than the amount calculated using the prescribed rate must provide evidence to the satisfaction of the relevant tax commissioner, the notification said.

Separate rules for residents and non-residents

S.R.O. 1641(I)/2026 sets out the procedure for residents earning income from remunerative social media content. It applies to resident persons deriving income through interaction with users in Pakistan on social media platforms.

For non-residents, S.R.O. 642(I)/2026 applies where income earned through interaction with users in Pakistan qualifies as Pakistan-source income under the Income Tax Ordinance, 2001.

The rules also establish a threshold for determining whether a non-resident’s activities amount to “systemic and continuous soliciting of business activities or engaging in interaction through digital means”.

A non-resident falls within the threshold if the number of users exceeds 50,000 in a tax year or 12,250 in a quarter, according to the notification.

Advance tax and income declaration

People covered by the rules must pay advance income tax on a quarterly basis.

The tax will be calculated using the prescribed income and remuneration formula and will be payable or recoverable under Section 147 of the Income Tax Ordinance, 2001.

Income earned from remunerative social media content must also be declared separately in the annual income tax return.

The rules empower the relevant tax commissioner to amend a return if the declared income is lower than the amount calculated under the special mechanism and recover any resulting tax liability under the Income Tax Ordinance.

What counts as social media content

The FBR defines a social media platform as an internet-based service primarily designed to allow users to interact and share user-generated content, with economic value arising from user participation, network effects and the monetisation of user engagement or data.

Social media content covers digital information, communications and creative material generated or published by users, where its value stems from audience engagement, reach or distribution facilitated by the platform.

The rules define “remunerative social media content” as content that generates remuneration in any form.

The notifications state that provisions of the Income Tax Ordinance that are not specifically addressed by the new rules will continue to apply to people earning income from remunerative social media content.

The amendments were issued under Section 99C and other relevant provisions of the Income Tax Ordinance, 2001.