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FBR Wants to Tax Google, Without Knowing How!

By  | 29, Nov 2012 | 23 Comments



اسے اردو میں پڑھیے

Google Pakistan1 FBR Wants to Tax Google, Without Knowing How!The Federal Board of Revenue (FBR), authority responsible for taxing businesses and individuals in Pakistan, is seeking ways to tax internet giant Google, on the revenue generated through its business in Pakistan, reported The News citing unnamed sources.

It is said that FBR got the hint of taxing Google after it learned that Indian tax authorities slapped Google with a fine of 760 million Indian rupees or USD 13.8 million for evading taxes and misleading Indian authorities by under-reporting its revenues.

After getting the news from India, FBR chairman reportedly instructed the tax departments to identify the business activities of Google in Pakistan to bring it under the tax. From what we have heard, FBR is clueless on how to tax Google, as of now at least.

When we last checked with Google, it had said that tax on advertising revenues is deducted in respective courtiers where advertisers make payments for doing business with Google. For example, Google is not liable to pay tax to Pakistani authorities if someone buys Google ads from USA, as advertiser is already taxed in his/her country.

Google had agreed that local ad buying (from Pakistan) could be taxed, but its usually purchased through credit cards and doesn’t come on radar.

Experts opine that Google can be confined (by Pakistani Authorities) to deduct tax for all media buying with-in Pakistan at the time of purchase. Similarly, all adsense payments can be taxed at the time of issuance of payments to Pakistani publishers. This process of deducting tax from publishers and advertisers (at the time of transaction) is in practice in USA and European countries.

It is still unclear and disputed that revenues made through ad clicks that are generated from Pakistan are tax-able (under the head of income tax) or not. It is believed that Google pay taxes on gross income in its native country and hence if there is anything to be taxed in Pakistan or other countries that will impact its tax rate returned in USA. Which is seemingly hard to achieve.

According to media reports about Rs. 320 million were spent in online media from Pakistani advertisers during last fiscal year, 35 percent of which is shared by Google.

Experts say that taxing Google is very much possible but extremely hard. They say that Pakistani tax authorities will have to be vigilant and will have to come out of the box to tax a company like Google.

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  • LocalPakistani

    Shutdown the stupid site. I don’t want the people of Pakistan to fund the free food and massages for Google Employees in MountainView.

    • http://www.facebook.com/basilkhan Basil Khan

      Do they pay you to be a dumbass or were you born this way.

      • http://twitter.com/JKhaan Javed Khan

        Don’t blame him. The majority of Pakistan is diseased just like him -_-

        The FBR is as clueless as it was since its inception. It does not surprise me, since all the so called “experts” being hired are “sifarshis” or “parchi” walas.

        • LocalPakistani

          No but did Google pay you to kiss their buttocks!

          And stop insulting Pakistanis. If you don’t like the way things are done here either help them improve or move to MountainView – and allow us to tax everyone.
          Level playing field for Locals and Goras.

          • http://twitter.com/JKhaan Javed Khan

            ^ Start by paying taxes yourself. Show us a good example. Its easy to talk behind a computer screen, but when it comes to real action, nobody has the balls to go through.

            You can prefer to stay ignorant and stick your head in the sand and pretend nothing happened. Yeah, life’s a bitch, when it gets hard, fuck it.

          • Waqas

            read my comment. you can be sure I’ll move to UAE If they charged me as a publisher. even though Im not using any pakistani service to conduct my business. We the publisher have no facilities at all. I’ll be happy to pay tax in UAE.

            • usama

              one day u have to come pk

      • Shahid Inspector

        Seems like some officer of FBR slapped your behind with a huge tax bill. Cry forever.

    • http://www.isharearena.com/ M.Aswad Mehtab

      lol People make living out of it …. if Google shut down its services in Pakistan or bans all adsence accounts here it will not effect Google at all .. but here hundred thousands will lose there source of income …

      • Muhammad Yasir

        yes you are right… Google does not seem to care about countries like Pakistan.Begggars are not choosers!

    • Saad Durrani

      Suggest a Pakistani alternative. They get free food and massages because they work to provide services that people like you and me use in daily lives.

  • http://www.facebook.com/MuhammadNoumanYounas Nouman Younas

    I think this is a good stepp.. dont know much but seems like good..

    • http://www.technize.net/ Usman Khurshid

      I also think this is a good step. But usually, the FBR department will tax the publishers and not the advertisers which will be unfair.

      • http://www.facebook.com/bilal.iqbal.775 Bilal Iqbal

        this will be fair as the advertisers are paying taxes on their income in their native countries while publishers are generating revenue from ads.
        however this matter must be discussed with all stakeholders and their should be an acceptable solution for all.
        Taxes are necessary for any economy but implementation should be fair to decrease burden.

        • http://www.facebook.com/MuhammadNoumanYounas Nouman Younas

          Yar ab ahsas horha hy.. yeh to ghalat hy… Publishers will suffer with 6% deduction in their income while other corporates are not paying taxes

  • http://www.isharearena.com/ M.Aswad Mehtab

    “Pakistani tax authorities will have to be vigilant and will have to come out of the box to tax a company like Google.” = impossible lol

  • http://www.facebook.com/syedkashifulhasnain Syed Kashif Ul Hasnain

    Interesting :)

  • Waqas

    why those douchebags want to tax publisher. even when publishers aren’t using any business service in pakistan. they even help publisher to get paypal like service and other international shopping service. idiots born in backward villages, ruling the FBR without heads. Already they charge the tax on WU payments. Are they trying to double charge? We already are paying half of our incomes in different kinds of taxes on utility bills and food and patrol. I’d rather find a way to save the taxes instead of paying these traitors. because they don’t pay us back.

    instead it would be better to charge the feudals, army and politicians. yeah, I know they can’t even think to collect taxes from them. after all FBR’s bread comes from their leftovers.

    • http://www.facebook.com/bilal.iqbal.775 Bilal Iqbal

      your wish is good. FBR and NADRA are bringing a mechanism for expanding tax net by analyzing different expenditures relating with CNIC’s to estimate the real income of people instead of relying on what they told.. this will bring millions of non tax payers into tax net and will generate revenue from non or less tax payers..
      working on this project is continuous and it will be very important for Pakistan.

  • http://www.facebook.com/profile.php?id=1176984930 Jawad Hussain

    well well…. we always start fighting on useless issues, fact is, google is about to be in tax net, no matter how and when, We Pakistanis can find any odd way for this…lol

  • http://www.facebook.com/profile.php?id=1176984930 Jawad Hussain

    @ M.Aswad Mehtab well dear, ask google about it, will it be effected or not! Pakistan give them services at cheapest rates, have u seen any other countrymen doing copy paste (advertisement) job as a full time job to earn their expanses? we take it as complete full time job and google know it.

  • Saad Durrani

    Well, Google has FOUR offices in India while it has not even one in Pakistan. Secondly, many freelancers earn from US based websites. The US government does not charge any taxes on it.

  • http://www.waqascheema.com/ Waqas Cheema

    now they will charge google lol