ISLAMABAD: In a significant move to bring the digital economy into the tax net, the Federal Board of Revenue (FBR) has issued a new notification establishing a special procedure for taxing income earned from social media content.
The notification, S.R.O. 1641(I)/2026, dated September 23, 2026, introduces a new Chapter II-A into the Income Tax Rules, 2002. The rules, enabled under section 99C of the Income Tax Ordinance, 2001, apply to all resident persons earning income from “remunerative social media content.”
Under the new framework, a minimum income from social media content will be calculated using the formula **(A – B)** , where ‘A’ is the total remuneration received, and ‘B’ represents total expenses, capped at a maximum of 30% of total revenue.
A key feature of the new rules is the method for determining “total remuneration.” Taxpayers will be required to declare the higher of two figures: either the actual remuneration received (in cash or kind) or a calculated amount based on a “revenue per mille” rate. This rate is set at **PKR 195 per 1,000 views** on video content shared on platforms like YouTube.
The rules state that if a taxpayer believes their actual remuneration is less than the calculated threshold, they must provide evidence to the satisfaction of the Commissioner.
The notification also outlines compliance procedures. Taxpayers under this special procedure are required to pay advance income tax on a quarterly basis, calculated according to the new formula, in accordance with section 147 of the Ordinance. Furthermore, income from social media content must be declared in a special part of the annual Income Tax Return.
To ensure compliance, the rules grant the relevant commissioner the authority to rectify errors of “omission or commission” if the declared income is less than the amount calculated under the new formula, and to proceed with recovery of the due amount.
The definitions section of the notification broadly defines a “social media platform” as an internet-based service whose economic value arises from user participation and the monetization of user engagement or data. “Social media content” is defined as any digital material generating value from user engagement, including content capable of generating advertising or sponsorship revenue.
The notification was signed by Muhammad Amin Qureshi, Secretary (Rules & SRO) at the FBR.
