Netflix subscription gets expensive after new tax

The new wave of taxes continues to grip masses in Pakistan and in the latest development, the banks are directed to receive 13 percent provincial sales tax on advertising services that Netflix uses.

The directions were given by the Sindh Revenue Board (SRB).

Following that, Netflix users are now subjected to a 3 percent Sales Tax on IT Services for paying subscription fees with debit/card cards. Additionally, there is a 5 percent Advance Tax on International Transactions (Filers), and Card Transaction Charges have been set at 4 percent, plus a Federal Excise Duty.

The advance tax on international transactions is entirely different for non-filers. The advance tax on non-ATL individuals would be 10 percent.

Apart from that, 4 per cent tax has been imposed on card transaction charge and a federal excise duty.

All these taxes will be collected by the Sindh Revenue Board, which is responsible for managing these new tax rules.

It is worth mentioning here that the Federal Board of Revenue (FBR) sent a notice to Netflix, demanding that the company pay 200 million Pakistani rupees in taxes for the past two years.

The FBR’s demand was based on the fact that Netflix made over one billion Pakistani rupees in the country in 2021.

Netflix Pricing (PKR/without taxes)

Mobile: Rs. 250/month

Basic: Rs. 450/month

Standard: Rs. 800/month

Premium: Rs. 1,100/month

Netflix says on its website that depending on where the user lives, they may be charged taxes in addition to their subscription price.