The Federal Board of Revenue (FBR) released a new taxation notification on April 1, 2026. The government published S.R.O. 546(I)/2026 to introduce a social media tax. FBR defined special procedures for taxing individuals who earn money from remunerative social media content. These draft amendments fall under section 99C of the Income Tax Ordinance, 2001. The rules specifically target resident persons making income through interactions with users in Pakistan on social media platforms.
Social Media Tax: Defining Content Platforms
The FBR explicitly defines a “social media platform” as an internet-based service. Its main purpose is enabling users to interact and share user-generated content. The economic value of these platforms comes from user participation, network effects, and the monetization of user engagement or data.
Furthermore, the FBR clarifies “revenue per mille” as the revenue generated per 1,000 views on a shared YouTube video. Currently, the FBR sets this calculation rate at PKR 195. However, the board retains the right to revise this figure from time to time.
Income Calculation Methodology
The FBR has established a strict formula for calculating minimum income. Taxpayers must subtract their total expenses from their total remuneration received. Notably, the FBR caps the allowed deductible expenses at a maximum of 30% of total revenue.
Consequently, total remuneration is calculated using two methods, and the FBR will apply the higher amount. The first method multiplies the revenue per mille by the average number of views per content, and then by the total number of posts made during the year. The second method simply looks at the actual remuneration a person receives, whether in cash or in kind.
Tax Payments & Compliance
Every content creator falling under this new procedure must pay advance income tax. They must calculate and pay this advance tax for one quarter. The FBR will manage payments and recoveries according to section 147 of the Income Tax Ordinance, 2001.
Additionally, taxpayers must declare this income in a special designated section of their Income Tax Return every year. If a creator declares an income lower than the calculated amount, the relevant commissioner holds the power to intervene. The commissioner can rectify the omission or commission error directly in the return. Subsequently, they will proceed to recover the due amount under the provisions of the Income Tax Ordinance, 2001.
Finally, the FBR has given the public a strict seven-day window from the notification’s publication date to submit any objections or suggestions for consideration.
