As per the latest sources, the Government of Pakistan (GOP) is considering to impose income tax on earnings generated through online business. In particular, earnings earned by the individuals from media sources like YouTube and Google that exceeds a value of $400 or PKR 64,400 per year will be liable to pay income tax on the earnings. The tax will be set at 15% on foreign incomes.
The decision is an outcome of the pressure from the International Monetary Fund (IMF) to impose a tax on foreign incomes. Previously the foreign incomes were majorly exempted from taxation. In addition to it, all earnings above a certain threshold will have to be deposited in a bank account and have to be routed through the State Bank of Pakistan (SBP). No transactions through services like Western Union will be allowed. The rule is predicted to be effective from the very 1st of January 2021.
The details of the transactions being made will also be shared with the Federal Board of Revenue (FBR). The decision comes as a surprise to most in the freelancing community although it is not unexpected as the FBR had been sending tax notices to content creators as such to YouTubers like Nadir Ali in the past. The decision seems somewhat unfair as the $400-dollar annual limit is barely enough for the expenses that are incurred and the effort that goes into content creation. In comparison, an annual income of amount less than PKR 600,000 is not taxable inside Pakistan according to the latest tax budget.
News Source: Dunya
Image source: Pro Pakistani