Reports have it that the Federal Government is considering hiking up taxes on freelancers and content creators imposing a 30% tax on people earning from social media platforms like YouTube and TikTok. Is the freelance sector a suitable place to impose a tax hike or does the government need to look for other options?
Freelancing in Pakistan during the past decade
During the past decade or so, Pakistan emerged as one of the world’s top outsourcing destinations. In 2015, outsourcing website ‘Upwork’ stated that Pakistan ranks as the 5th top country in the world for most freelancing earnings.
With digital platforms like Youtube and TikTok offering remuneration to content creators, the trend of creating online content only increased ever since. During 2021-22, Pakistani freelancers experienced a 16.74 percent rise from the previous year’s earnings.
Who does the freelance sector mainly sustain?
The availability of freelancing jobs has mostly catered to the youth of Pakistan- with freelancing in the country mostly being led by younger minds under the age of 30- which is about 64% of the total population. Affording global exposure, freelancing opened many doors- allowing people from different walks of life avail the opportunity of making money for themselves and for their needs as content writers, web designers, and academic writers etc
Students, housewives, and the specially-abled particularly benefit from the opportunity to make money while working from home, with flexible hours, performing many other duties alongside their part time jobs.
Some expected changes the upcoming budget will introduce to the freelance sector
The upcoming budget would withdraw the perks and subsidies given to freelancers exporting their IT services and bringing much needed foreign exchange to the country, which would be a huge setback for the entire industry as it will exacerbate finance condition of lower income people.
According to the details, a number of suggestions have been given which would be incorporated in the next budget, including increased tax on income of more than one million rupees per year, earnings from freelancing, online games, YouTube, TikTok, and other social media platforms.