Pakistan Imposes New Taxes on Netflix Subscriptions Through Banks – Startup Pakistan

Pakistani authorities have decided to introduce several new taxes on Netflix. Banks in Pakistan are now required to deduct a 13 percent provincial sales tax on advertising services that Netflix uses. This means that when Netflix advertises its services, it will be taxed by the provincial government.

For people in Pakistan who use Netflix, there is now a 3 percent sales tax on the subscription fees they pay with their debit or credit cards. So, when someone in Pakistan pays for their Netflix subscription, they will have to pay a little more due to this new tax.

Additionally, there is an advance tax on international transactions. This means that when people in Pakistan make transactions with international companies like Netflix, they have to pay an extra tax. For those who file their taxes, the rate is 5 percent. For those who do not file their taxes, the rate is higher, at 10 percent.

On top of these taxes, there is also a 4 percent card transaction charge and a federal excise duty. All these taxes will be collected by the Sindh Revenue Board, which is responsible for managing these new tax rules.

This new tax plan comes after the Federal Board of Revenue (FBR) sent a notice to Netflix, demanding that the company pay 200 million Pakistani rupees in taxes for the past two years. The FBR’s demand was based on the fact that Netflix made over one billion Pakistani rupees in the country in 2021.