Pakistani authorities have introduced a series of new taxes affecting Netflix subscriptions. Banks in Pakistan are now required to deduct a 13 percent provincial sales tax on advertising services used by Netflix, meaning the company’s advertisements will be taxed by the provincial government.
For Netflix subscribers in Pakistan, a 3 percent sales tax will now be applied to subscription fees paid with debit or credit cards, resulting in slightly higher costs for users.
Additionally, there is an advance tax on international transactions. People in Pakistan making transactions with international companies like Netflix must pay an extra tax—5 percent for tax filers and 10 percent for non-filers.
On top of these, a 4 percent card transaction charge and a federal excise duty will also be applied. The Sindh Revenue Board is responsible for collecting these taxes.
This new tax strategy follows a notice from the Federal Board of Revenue (FBR) to Netflix, demanding the company pay 200 million Pakistani rupees in taxes for the past two years, based on the fact that Netflix earned over one billion Pakistani rupees in Pakistan in 2021.