Pakistan creators seek review of tax on digital earnings

Digital artists, content creators and influencers in Pakistan have called on the government to review the taxation regime applied to their earnings, arguing that a more balanced framework could encourage digital entrepreneurship, attract foreign exchange and create opportunities for emerging talent. The appeal comes as the Federal Board of Revenue's withholding regime on platform revenues takes effect, and as the government continues its push to widen the formal tax base.

The FBR introduced a withholding tax on revenues received by digital content creators and social media influencers from platforms including YouTube, Facebook, Instagram and TikTok. Under Section 154B of the Income Tax Ordinance, 2001, banks and non-banking financial institutions are required to deduct tax when such revenues are credited or received. The FBR has described the measure as part of efforts to bring digital income into the formal tax system. The board also notified rules for taxing income from remunerative social media content through SRO 642(I)/2026 and SRO 1641(I)/2026, setting a minimum revenue benchmark of Rs195 ($0.70) for every 1,000 YouTube views and allowing taxpayers to claim expenses of up to 30 per cent of total revenue. The rules establish separate procedures for residents and non-residents. Creators maintain that earnings from social media platforms depend on factors beyond views and subscriber numbers, including audience location, advertising demand, platform policies, production costs and the nature of the content, and that taxation based primarily on gross receipts can weigh disproportionately on those with high production costs or irregular income.

Sher Muhammad, a Pakistani music-industry entrepreneur and digital music and rights specialist known as Sher Khumber, said taxation should not become a barrier to the growth of the country's content-creation industry, particularly for artists seeking to build audiences and monetise their work through international digital platforms. He said the emergence of artificial intelligence was already creating new challenges for the revenue streams of Pakistani artists, especially in the absence of comprehensive digital-rights protection, while additional taxation could further squeeze creators' earnings. "Pakistani cultural content, including poetry and music, is receiving appreciation worldwide through social-media platforms. However, many talented artists do not have the technical expertise or resources required to optimise the monetisation of their content," he said. He urged the authorities to consider a more supportive tax framework that recognises the costs and challenges of producing and monetising digital content, adding that lower taxation would help Pakistani artists establish digital studios to promote local culture and music through social media platforms and video-sharing websites.

Dr Noman Ahmed Said, chief executive of SI Global Solutions, said content creators should contribute to Pakistan's tax base, but argued that the system should recognise their production costs and irregular income patterns. He noted that withholding tax on social-media platform receipts could be substantial for creators operating on thin margins, and called for reconsideration of the 30 per cent expense ceiling in the FBR's special procedure. "Pakistan should recognise documented business costs, simplify compliance and consider targeted relief for emerging creators," he said, cautioning that an excessive tax burden could affect investment, employment and foreign-exchange earnings from the digital economy. He added that neither the nationwide tax revenue gain nor the potential economic loss can responsibly be quantified without reliable sector data, and that the FBR should consult creators and other stakeholders and publish an impact assessment.

There is no reliable national average for digital content creators in Pakistan, because earnings are heavily skewed and mostly unreported, with most creators earning little or nothing. Salaried content-creator roles in Karachi show a median of about Rs60,000 a month, with a common range of Rs30,000-80,000, while independent creators depend more on brand deals than platform advertising. Rate guides cited for 2026 put a nano creator with under 10,000 followers at roughly Rs500 to Rs25,000 per post, a micro creator with 10,000-100,000 followers at about Rs5,000-150,000, and larger accounts at several hundred thousand rupees to over Rs1 million. Local estimates put YouTube ad income at about Rs5,000-20,000 for 100,000 monthly views and Rs50,000-200,000 or more for one million views, depending on niche and audience location, while mid-tier creators combining advertising, sponsorships and affiliates often report Rs50,000-400,000 a month. The FBR has also established a Lifestyle Monitoring Cell that uses artificial intelligence and social-media intelligence to identify potential discrepancies between publicly observable lifestyles and declared income and assets.