FBR proposes Tax on International Tech Giants like Google and Facebook in Pakistan

Federal Board of Revenue (FBR) is looking to tax the global tech giants like Facebook, Google, and Uber in Pakistan. These tech giants are earning revenue in the country, thus FBR feels that tax should be taken from these companies.

The tech companies are earning money in Pakistan through advertisement mainly. As per FBR, they should pay 5% tax on their total revenue in Pakistan.

Senate’s Standing Committee was told about the FBR’s proposal by Member Inland Revenue Policy at FBR Dr. Mohammad Iqbal. The proposal was rejected by Senate Committee members saying that it will negatively impact the foreign investment growth in Pakistan.

Now it will be the National Assembly’s decision to either accept or reject the proposal.

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FBR also suggested that it should be given the right to declare any foreign business or company as fake on basis of whether it pays taxes in Pakistan or not and secondly whether it has any economic value or not for Pakistan. FBR also wanted to bring the off-shore companies to pay taxes along with tech firms.

Member of Standing Committee Dr. 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.”

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However, 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.”

Some firms split their businesses just to evade payment of taxes. FBR proposed that these companies should also be asked to pay taxes but the Committee rejected this as well.

As per a committee member FBR’s suggestions are “anti-investment and anti-capital formulation.”