FBR Intends to Impose 33% Taxes on Google in Pakistan

Federal Board of Revenue has intentions to impose a 33% tax on revenues that Google generates from Pakistan, reported Express Newspaper.

When and if implemented, Google — and other large networks such as Facebook, Daily Motion, Yahoo etc. — will have to pay a flat 33% of their revenues earned from Pakistan as taxes.

However, the mechanism for finding out the revenues of these companies earned from Pakistan is yet to be determined and authorities concerned are evaluating various options for this.

This is not the first time that FBR has shown such intents, in fact the board has discussed a similar option to include Google and other Internet publishers in tax-net during PPP government as well.

FBR think that if local publishers are paying money to Google (and other internet companies), then these companies are liable to pay taxes in Pakistan.

FBR said that Google, Facebook and all other large-scale web companies pay taxes in every country including India, UAE, Egypt etc. and similarly they are bound to pay taxes in Pakistan too.

FBR’s summary is to be moved to Finance Minister soon for a final verdict on the matter. If approved, government will go ahead with the plan to tax such internet companies that earn revenues from Pakistan.

According to estimates, Pakistani brands spent Rs. 25 billion for internet marketing during 2014, and a large chunk of this figure was collected by Google, Facebook, Daily Motion and Yahoo.

Local marketing agencies concur the idea of taxing these foreign internet companies, particularly when internet marketing spend in Pakistan is only going to increase during days to come.

For those who are not familiar, internet companies pay taxes based on buyers’ origins. For example if someone is buying marketing space on Google from USA, then tax is deducted and submitted to American authorities.

Similarly, if someone is buying adspace from Pakistan, these companies should pay taxes to Pakistani authorities, which they were avoiding till now.

Taxes on Pakistani Publishers

Such internet publishers who are making money through ad-revenues are also likely to be included in tax-net. One of the largest web-publishers in Pakistan was recently sent a notice to FBR to pay taxes for their ad-revenues, including those of adsense.

However, the matter is still to be discussed and finalized before a legislation is made on this.

Tech reporter with over 10 years of experience, founder of ProPakistani.PK

  • Rehmat Ali

    hain….pakka..kasam se hassi a ra i :D

  • Rehmat Ali

    Atta you also have to file tex of your earning through advertisement on ProPk. Main tu batao ga FBR ko :D

    • aamir7

      We do this already :)

      • Ahmed Habib

        50000*16/100=8000 usd *100=800000 rs.

  • a good step!

  • This actually needs to be done ASAP. But the government should make sure that they keep taxes to a reasonable amount so that major players just don’t leave the market altogether.

  • Wait! you mean FBR (a government entity of Pakistan) wants to impose tax on Google (a private entity which is not registered in Pakistan) but at the same time the IT Ministry (a government entity of Pakistan) would not allow YouTube (a private entity by Google not registered in Pakistan) to be unbanned until they register it. Lol! But seriously I think its a good step, only I know our government is not capable enough to do this on the legal end of this.

    And before people come bashing me on this, do keep in mind I am talking about the IT ministry of Pakistan where people from the deforestation department are employed to fill jobs :) yes you heard me right.

  • askarian

    Google literally won’t give a crap about these taxes and in addition to just ignoring FBR might also yank access to Google from PK altogether lol

  • This is highly unlikely, unless google, yahoo, dailymotion have their offices in pakistan – until then this seems a distant dream.
    What they can really do is ask big advertisers who are tax payers to pay taxes on online advertisements that they make – other than that , unless they have an office in pak this seems distant.

    There are several other small companies that advertise on these networks –

    btw which was the largest publisher that received tax notice ?

  • NaughtyCaller

    “For those who are not familiar, internet companies pay taxes based on buyers’ origins. For example if someone is buying marketing space on Google from USA, then tax is deducted and submitted to American authorities.

    Similarly, if someone is buying adspace from Pakistan, these companies should pay taxes to Pakistani authorities, which they were avoiding till now.”

  • Eli Ehsan

    Good Luck with that FBR or any R with a B(rain)! even US govt can’t take more than 4% from Google in its 3 decade long history.. :D

  • reshhia

    Youtube to unblock karti nhi gov adsense ka tax kiu pay kara.

  • A Anjum

    How accurate are the figures? There is this statement that “brands spent PKR 25 billion on internet marketing in 2014”. PBA and other sources indicate that total marketing spending was US $500 for 2014. Are we saying 50% of total is going to internet? This can’t be happening … given even in west this split is around 60% (TV) 40% (others)

    • M. Ghouse Uddin Khan

      US$ 500 means PKR. 5000 :) but according to Gallup report the total ad spend of Pakistan in 2014 was PKR. 55 Billion and Online ad spend is about PKR. 2 Billion according to auroa December 2014 edition.

  • M. Ghouse Uddin Khan

    Those publishers who are not willing to spend their budget in any shape they have no right to generate the revenues from Pakistan. If our market is not that much potential why they are accepting the advertising orders? Google Operating from Singapore, Connect ads (Facebook, twitter, Skype, Daily motion) is operating from Cairo, Yahoo operating from Dubai where is Pakistan share? On the other side our ad agencies spend 70% of their campaign budgets place in international properties so as local publishers who give opportunities of jobs, career and others are suffering a lot. if this part of percentage will spend in local publishers they would create more employment/opportunities which serves to this country and residents of Pakistan.In my view FBR should take some major step to ban the advertisement and also ban those agencies who support and place advertisement on non tax paying publishers.

  • Abdullah

    This is a great decision but how they implement and moniter the database to collect revenue fb and Google made billions till now from Pakistan if fb and Google blocked in Pak they will loss big chunk of revenue FBR must force them to Pay tax and also other tech companies

  • faaria

    Stupid Govt. First make conditions feasible for investment by big companies and then try to impose taxes.. Google already have infrastructure in India, Egypt ant UAE. So its fair if Google pay taxes to them… Govt ko bus apna loot k khanay ki pari hai.. baki sab bhar main jae

  • Inam

    Well good fucking riddance!

    • Guest

      I have been noticing you since the day when you joined, that you use more words of “F”, why? You are a girl? I don’t think so! Change your name! Thx

      • Inam

        My gender and my name is my problem. Not yours buddy. Is fishing ok for your reading pleasure?

      • irfanzone

        Here comes a moral crusader

  • guest

    Apne mulk main se to tax lia nahi jate yeh google se tax lain gai

  • theFox

    Out IT ministry is not capable of doing this. FBR will need a million years to come up with a system to impose and monitor taxes.