P for Pakao YouTube Channel Hit by FBR for Tax Evasion
A popular YouTube channel, P for Pakao, has been served a notice of Rs. 13 million by the Federal Board of Revenue (FBR) for income tax evasion. The channel, owned by Nadir Ali, has over 3 million subscribers and 820 million views, making it a significant player in the online content creation space.
The FBR’s Intelligence and Investigation Department has concluded its inquiry against Nadir Ali, accusing him of hiding revenue. The case has been forwarded to the Chief Commissioner Inland Revenue Tax Office (RTO)-III in Karachi for recovery of the tax evasion. According to FBR officials, Nadir Ali was sent multiple notices during the inquiry but failed to respond to any of them.
Background of the Case
Nadir Ali enrolled his channel with the FBR in October 2017. For the first two years, 2016 and 2017, he reported no income. In the subsequent two years, he declared Rs. 0.89 million and Rs. 14.44 million, respectively. However, the FBR believes that Nadir Ali has not submitted a full report of his earnings and has hidden a substantial portion to avoid tax payments.
According to FBR records, Nadir Ali received Rs. 2.186 million in 2017, Rs. 28.335 million in 2018, and Rs. 46.762 million in 2019. These figures have been verified with YouTube. Additionally, he earned Rs. 10 million in foreign exchange during the year he claimed privilege without furnishing evidence. He also maintained a bank account that was not acknowledged in the wealth declaration form.
Implications of the Case
This case is a wake-up call for other YouTubers, vloggers, and online content creators who earn a significant income online. The FBR has taken a strict stance on taxing online income, and it is essential for content creators to file their tax returns to avoid penalties. Incomes made through online means are taxable, and records must be maintained for five years and filed in the annual tax return filings.
Nadir Ali has verified receiving the notice and stated that he has responded through his lawyer, requesting an extension to fulfill the reply. His plea was approved, and he is currently in the process of responding to the FBR’s notice.
FAQs
- Is online income taxable in Pakistan? Yes, incomes made through online means are taxable in Pakistan.
- What are the implications of not filing tax returns for online income? Failure to file tax returns for online income can result in penalties and fines, as seen in the case of Nadir Ali.
- How can online content creators maintain records of their income? Online content creators must maintain records of their income for five years and file them in the annual tax return filings.
The FBR’s crackdown on tax evasion is a significant step towards ensuring that all individuals, including online content creators, contribute to the country’s tax revenue. As the online content creation space continues to grow, it is essential for creators to be aware of their tax obligations and file their tax returns accordingly.
