The Federal Board of Revenue (FBR) is actively considering the implementation of a new tax regime specifically targeting income generated through digital platforms such as YouTube and various other social media channels.
This potential tax measure is being explored as a key component of the upcoming federal budget for the fiscal year 2025-26, with a clear objective of tapping into the rapidly expanding digital economy within Pakistan.
Sources within the FBR indicate that the decision to seriously explore this new taxation avenue is a direct response to the significant and noticeable surge in earnings reported by content creators and influential figures actively operating on popular platforms like YouTube, TikTok, and Instagram. The FBR believes that bringing these digital earnings into the tax net could substantially help in broadening the country’s overall tax base and align its fiscal policies with prevailing global trends in the digital sphere.
Notably, several policy think tanks have already submitted formal proposals to the FBR advocating for the implementation of such a tax. The Institute of Cost and Management Accountants of Pakistan (ICMAP) has specifically recommended that a 3.5% tax be levied on annual earnings exceeding PKR 5 million generated from platforms like YouTube. ICMAP estimates that the successful implementation of this tax could potentially contribute an additional Rs52.5 billion to the national treasury—representing approximately 0.06% of Pakistan’s current Gross Domestic Product (GDP), which stands at around $350 billion (or Rs87.5 trillion).
The FBR is currently undertaking a serious evaluation of the feasibility and potential impact of this proposal. Officials within the revenue authority acknowledge the transformative role that YouTube and similar digital platforms are playing in reshaping economic activity and creating significant new revenue streams for individuals. As part of its broader strategy for the digital economy, the FBR may also consider introducing a tax on digital subscription services such as Netflix, Disney+, and Hotstar. However, the FBR is reportedly considering potential exemptions for low-income users and minors to ensure that the overall tax burden remains equitable and does not disproportionately affect vulnerable segments of the population.
By potentially including earnings from YouTube and other social media platforms within the tax net, the FBR aims to ensure a fair contribution from high-earning digital entrepreneurs and to generate additional revenue to support crucial public sector development initiatives. This potential policy shift underscores the FBR’s evolving approach to modern taxation as the country actively adapts to the ongoing global digital transformation. The FBR is expected to finalize its official position on the taxation of YouTube-related earnings in the weeks leading up to the highly anticipated official budget announcement.
