The recent taxes of the Sindh Revenue Board (SRB) have affected users in Pakistan by imposing new taxes on Netflix which is a video on demand over internet streaming media. These additional taxes will imposed on the back of banks and as a result, they will charge various new fees to Netflix transactions.
Under the new tax regulations, Netflix users will Pay:
- The application of a sales tax of 3% in IT services.
- The filers will be charged an advance tax of 5% of their imported items.
- Kouf- All You Can Eat: $15 + 4% of the card transaction.
- Imposition of federal excise duty to those subscriptions that people make through debit/credit cards
SRB has introduced these rules with banks and other financial centers, recognized by the State Bank of Pakistan as ‘collecting agents. ’ This implies these centers will collect a 3% Sindh sale tax while the customers make payments to Netflix.
Published in September 2023, the “Sindh Sales Tax Special Procedure (Tax on Specified Services) Rules, 2023” was devised to enable the collection of this 3% tax from cloud-based entertainment services including Netflix, for the transactions made with the service providers who are based outside of Pakistan.
Currently, Netflix plans in Pakistan are the Mobile plan at Rs. 250 per month, Basic plan at Rs. 550 per month, Standard at Rs, 950 per month, and Premium at Rs. 1,100 per month. Store bar further explains that the customers may have to pay other taxes depending on their geographical location in addition to the base subscription fee as stated by Netflix.
