The Federal Board of Revenue (FBR) has proposed to amend the Income Tax Rules, 2002, aimed at integrating social media content creators into the nation’s tax framework. This initiative targets individuals who generate substantial revenue from platforms such as YouTube, TikTok, and Instagram through advertisements, sponsorships, and other monetisation strategies.

According to documents, the FBR seeks to tax income accrued from content that engages Pakistani users. The proposed modifications specify that non-resident individuals deriving income from Pakistani users on social media platforms will be subject to taxation if their content reaches at least 50,000 users annually. This threshold is further broken down to 12,250 users within any quarter.

Taxable earnings will be determined by evaluating the income against allowable expenses, with considerations for the volume of content and average views. Influencers will be required to declare this income separately in their annual tax returns, ensuring transparency and compliance.

The FBR’s notification outlines a special taxation procedure whereby those falling under this new rule must calculate their advance income tax using the methods specified in rules 19M and 19N of the Income Tax Ordinance, 2001. The calculated tax for each quarter will then be payable or recoverable under the provisions of section 147 of the same ordinance.

Furthermore, the proposed rules allow social media influencers to claim up to 30% of their income as deductible expenses.

The FBR has opened the floor for objections and suggestions regarding these amendments, providing a seven-day window.