The government is expected to end income tax exemptions in the new budget under the strict demands of the International Monetary Fund (IMF).
According to sources, the government will most likely raise taxes on income from online gaming and social media apps, including the popular video-sharing platform TikTok. Another measure that is expected is an increase in tax on YouTube payments.
The proposal has been in the news for several years and was pursued by the FBR in 2015. However, the authorities decided not to proceed due to strong opposition from relevant stakeholders, as the sector was in its infancy and taxation would have hampered its growth.
The earnings from these various social media applications are estimated to be in the millions. Furthermore, given the sector’s recent growth, many social media companies have expressed interest in establishing local offices in the country.
The government has also requested that social media companies establish offices in Pakistan and pay content creators in local currency.
Furthermore, it was suggested that income tax on people earning more than Rs. 10 million per year be significantly increased.
