Government of Pakistan Mulls Income Tax on Foreign Income

The government of Pakistan is considering to impose a 15 percent income tax on earnings from Youtube, Tiktok, or other social platforms.

Sources in the finance ministry told News360 that the government of Pakistan has agreed to levy income tax on foreign income for fulfilling another condition of the International Monetary Fund (IMF).

It added that the preparations to revise rules for this purpose are underway.

The individuals earning from foreign sources will have to open a foreign currency account where their payments will land.

From January 1, the foreign remittances will only be credited to the relevant bank account of an individual. The government is also mulling to terminate services of Western Union money transfer.

Further, there is no tax on foreign income from other sources as of now. However, the State Bank of Pakistan (SPB) is considering to levy a 2 to 2.5 percent tax on it too.

Sources said that the government would bring income from Youtube, TikTok, and other social platforms under the tax net.

As per estimation, levying taxes on foreign earnings can generate up to Rs 8 billion in a tax year.

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According to SPB figures, foreign remittances make up about $400 million annually.

Digital media outlets oppose the move

Following the government’s possible decision to impose taxes, major media outlets that operate purely on digital platforms like Facebook, Youtube and others have opposed the anticipated decision.

Until now, the beneficiaries have been earning millions of rupees monthly all of which is tax-free.