ISLAMABAD – For Pakistani social media creators, the rules of getting more views and earning more dollars are changing as FBR introduced a new framework to calculate influencer income, where views, sponsored products, free travel and services can all enter the tax equation.
Social media influencers in Pakistan, including eligible foreign nationals and overseas Pakistanis, are set to face a new tax regime as the Federal Board of Revenue (FBR) rolls out rules for calculating income earned through digital platforms. Under notifications issued on September 23, FBR brought social media earnings under a special procedure provided in Section 99 of the Income Tax Ordinance, introducing a mechanism that can determine an influencer’s taxable income even where the income declared by the creator is lower than the prescribed benchmark.
Under new mechanism, income from social media content will be determined using two figures, with the higher amount taken into consideration. The first calculation will be based on the number of views multiplied by the government-prescribed rate of Rs195 per 1,000 views. The second will be the influencer’s actual compensation received in cash or in the form of goods and services.
The income determined through the two methods will be compared and the higher figure will be used. FBR says views are publicly available and can be independently verified. Therefore, a creator cannot simply declare income below the prescribed threshold unless they provide evidence supporting the lower amount to the tax commissioner. Officials clarified that the Rs195 rate can be revised from time to time.
The new rules go beyond cash payments. If a sponsor provides an influencer with goods, travel facilities or services, their fair market value will also be treated as income. FBR linked this treatment to Section 18(1)(d) of the Income Tax Ordinance, under which such benefits can form part of taxable income. This means sponsored trips, products and services received in exchange for promotional activities can potentially enter the income calculation even when no cash changes hands.
The rules provide a mechanism for creators who believe their actual earnings are lower than the amount generated under the RPM-based calculation. Such influencers will have to submit evidence to the tax commissioner to support their claim. The issue could become particularly significant for creators who publish videos frequently, as many content creators upload multiple videos every day and views accumulate across both new and older content.
Another major change is the requirement for people covered by the special procedure to pay advance income tax every quarter. FBR has also empowered the relevant commissioner to address discrepancies where declared income falls below the amount determined under the special procedure. If a shortfall or error is identified in a tax return, the commissioner can make the necessary correction and recover the amount due.
Foreign influencers and Overseas Pakistanis
FBR has separately introduced rules for non-resident individuals by adding Chapter VA to the Income Tax Rules. The category includes foreign nationals as well as Pakistanis living abroad.
The rules apply to non-residents who earn income through social media platforms by interacting with users in Pakistan, provided that the income qualifies as Pakistan-source income under the relevant provisions of Section 101 of the Income Tax Ordinance and meets the prescribed threshold.
FBR established a specific threshold for “systematic and continuous promotion of business activities or interaction with users through digital means.”
A person will fall within the scope of the procedure if they have more than 50,000 users in a tax year, or More than 12,250 users in a single quarter. The same basic income-determination mechanism will apply to qualifying non-residents.
Under Section 101(3B)(b), the relevant digital activity includes situations where an agreement concerning the transaction or activity is concluded or signed in Pakistan, the non-resident has a residence or business place in Pakistan, or the individual provides services in Pakistan.
Although YouTube has been used as the benchmark for calculating income based on views, the FBR says the mechanism is not limited to YouTube. According to the FBR spokesperson, the rules cover income generated from all social media platforms, with social media defined broadly and compensation in any form included. Creators will therefore be required to declare actual income received from different platforms, whether in cash or through goods and services.
FBR has used YouTube as a benchmark because the platform’s view-based earnings can be measured, while noting that the prescribed rate could be revised in the future.
YouTube Income
YouTube remains one of the major digital income sources for Pakistani content creators. A channel seeking YouTube monetisation generally needs at least 1,000 subscribers and 4,000 hours of watch time over a year before it can apply for monetisation. Google Pakistan data cited in the report shows the scale of Pakistan’s creator economy.
There are around 1,000 YouTube channels with more than 1 million subscribers, 13,000 channels with more than 1Lac subscribers and around 1Lac channels with more than 10,000 subscribers.
FBR’s new benchmark comes as YouTube earnings themselves vary significantly depending on the country and type of content. According to the information cited in the report, Pakistan’s YouTube RPM is around six US cents per 1,000 views. At that rate, a video generating one million views could produce around $600 in creator revenue.
In reality, RPM can vary according to the type of content, with technology and education-related videos generally attracting higher rates. CPM refers to the amount advertisers pay for every 1,000 views, while RPM represents the amount received by creators after the platform’s share and other applicable deductions.
For the unversed, creators do not earn only from their latest uploads. Older videos continue to receive views and generate revenue. Around 40% of monthly earnings may come from new videos, while 60% can come from older content.
YouTube is not the only platform generating income for Pakistani creators. Facebook has also become popular among content creators and introduced monetisation in Pakistan several years ago, although rates in the country are described as relatively low.
TikTok, meanwhile, still does not have a monetisation programme specifically available in Pakistan. Pakistani creators seeking monetisation can register accounts in countries where TikTok’s monetisation programme is available.
With mobile and internet access expanding opportunities in Pakistan, digital platforms have increasingly become a source of income for young people alongside their roles in education, entertainment and information.
FBR’s latest rules now place that growing digital economy under a more clearly defined tax framework, with cash earnings, sponsored products, travel facilities and services all potentially forming part of an influencer’s taxable income.
FBR approves new tax rules for non-resident social media influencers
