The Pakistan federal government is considering raising taxes on freelancers and content creators who make money on sites like Facebook, YouTube, TikTok and other social media platforms. The federal government is considering putting a 30% tax on freelancers and content creators in the upcoming budget for fiscal year FY2022-23, according to the information.
The previous government led by Imran Khan had reduced the taxes and even removed tax for the registered freelancers in Pakistan. Government provided a platform to register and get exempted from tax paying. Also the previous government exempted the freelancers from tax for 10 years to increase the IT exports and also encourage freelancers to increase there work as it leads to making startups in Pakistan.
The upcoming budget would eliminate the benefits and subsidies given to freelancers and social media content creators who export IT services and bring in much-needed foreign exchange. If the tax is imposed, it will be a major setback for the entire business and exacerbate the financial situation of lower-income people.
According to the news a number of suggestions have been made, including an increase in tax on income of more than one million rupees per year, revenues from freelancing, online gaming, YouTube, TikTok, and other social media platforms, which would be included in the upcoming budget. The budget will be presented in next month, the budget deficit is increased making the government to take such steps to increase income.
Furthermore, it is reported that offices of online platforms and social media apps will be established in Pakistan, with revenue generated in Pakistani currency. The decision to raise taxes on freelancers and content creators was adopted in response to the International Monetary Fund’s (IMF) harsh conditions for restoring the loan program.