New Delhi, April 21 Pakistan’s Federal Board of Revenue's (FBR) new tax framework that levies a fixed charge of Rs 195 per 1,000 views on non‑resident YouTubers ended up being a "punitive measure" rather than progressive, and it introduced uncertainty and potential over‑taxation for creators, a new report has said.
The new flat levy applicable to influencers and digital creators who earn from Pakistani audiences ignores the reality of widely varying effective tax rates because YouTube monetisation differs by geography, content type and advertiser demand, the report from Nepal Aaja said.
Under the draft rules, creators who interact with over 50,000 Pakistani users a year or 12,250 in a quarter would be liable for quarterly advance tax. The advance tax must be filed in special returns and earnings declared under a dedicated section of the Income Tax Ordinance, the report said.
The rule effectively treats audience engagement as taxable revenue regardless of what creators actually earn and tax burden on them could range from 16 per cent to 66 per cent of actual earnings, it said.
Administrative feasibility is also in doubt as effective enforcement needs coordination with platforms like YouTube, raising complex questions of jurisdiction, data access, and compliance monitoring. Further, double taxation could also occur as many non‑resident creators already pay taxes in their home jurisdictions.
"In practice, this is less an income tax than a lump‑sum charge dressed up as one," the report said, adding the government skipped structural reforms to broaden tax base, and is instead relying on narrow, easy‑to‑collect stream digital views similar to how it has long depended on petroleum levies.
"The result is a policy that prioritises immediate revenue over fairness, efficiency, and sustainability," the report said.
Pakistan's new tactic also raises equity concerns in taxation as traditional sectors with substantial GDP weight including wholesale and retail trade continue to contribute negligible tax revenue.
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