In a recent development, the Federal Cabinet has endorsed a framework that will allow social media companies to work directly with the federal government of Pakistan regarding the devised rules and regulations. According to the new framework. major social media companies which include Facebook, Google, Twitter, etc. will be able to open their offices in the country but they will have to file taxes to the Federal Board of Revenue (FBR).
Government to Collect Taxes Directly From Google, FB, and Twitter
Till now, the FBR has made an initial tax collection target of PKR 10 billion from the respective social media giants and overall sector for the fiscal year 2021-2022. Though, some experts suggest that this is not possible currently as social media firms will have to establish their offices in the country.
In addition to that, the federal government has devised a sub-clause 22B in section and amended section 6 of the Income Tax Ordinance via the Finance Act which entails that the foreign digital companies shall face a 15% fee. The underlying reason behind the new development is to overall impose direct taxes on all major social media firms including assets and infrastructures. Furthermore, the new development would also bring online services like online sales and purchases under the tax regime.
Recently, a lot of new taxes have been imposed on the citizens. Therefore, This move is intended to take fewer taxes from the citizens of the country and put more taxes on those firms that offer digital services. Conclusively, this is the primary reason behind the new framework that clearly involves major tech companies operating locally from the country.