Pakistan is planning to impose a tax to expand country’s tax net including the giant Google and Facebook.
Federal Board of Revenue proposed to charge tax from international tech giant Uber, Facebook, Google and Amazon who are earning hefty revenues from Pakistan.
Member Inland Revenue Policy of the FBR, Dr. Mohammad Iqbal said in the briefing statement to the standing committee that the government wants to tax the digital advertising space along with hosting and maintenance of websites to tax the revenues of tech companies like Google and Yahoo.
According to the FBR proposal, these companies have to pay the 5% tax on the earning from Pakistan user data and advertisement in Pakistan.
The standing committee rejected the proposal concluding that it would discourage the digital revolution and foreign investment in Pakistan.
Standing committee member, Musaddiq Malik said;
If the FBR starts taxing the big data, this could undermine Pakistan’s ability to get benefit from the digital revolution. It seems that the FBR has made the budget on the assumption that it can no more tax people in Pakistan and has decided to go after offshore jurisdictions.
On the other hand, Dr. Iqbal said;
Pakistan has to tax those who are earning billions of rupees from our country under the pretext of bringing foreign direct investment.
It is up to national assembly to approve or reject the new tax reform by FBR.
However the investment lies under China Pakistan economic corridor is exempted from all kind of sales tax, income tax, regulatory duty and customs duty.