SRB Imposes Additional Taxes on Netflix Users in Pakistan

The Sindh Revenue Board (SRB) has introduced additional taxes on Netflix, affecting users who pay for the video-on-demand streaming service in Pakistan. Banks will now charge these new taxes under the latest regulations.

Netflix subscribers in Pakistan will face a 3% sales tax on IT services, a 5% advance tax on international transactions for tax filers, a 4% card transaction charge, and a federal excise duty when paying with debit or credit cards.

As part of the new tax rules, the SRB has designated banks and other financial institutions authorized by the State Bank of Pakistan as “collecting agents.” Under these regulations, a 3% Sindh sales tax will be levied on services, including cloud-based streaming platforms like Netflix. This tax must be collected by banks and authorized payment processors when users make payments to Netflix.

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The SRB’s “Sindh Sales Tax Special Procedure (Tax on Specified Services) Rules, 2023,” implemented in September 2023, aims to streamline the collection of this 3% tax on cloud-based content streaming services, specifically when payments are made to service providers based outside Pakistan.

Netflix offers various subscription plans in Pakistan, with prices ranging from Rs. 250 per month for the Mobile plan to Rs. 1,100 per month for the Premium plan. The streaming giant has indicated on its website that additional taxes may apply based on the user’s location, in addition to the base subscription fees.