The Federal Board of Revenue (FBR) has introduced taxes on foreign-produced TV dramas and advertisements as part of its efforts to safeguard and promote the domestic media industry.
Circular No. 12 of 2022, issued to explain the Finance (Supplementary) Act, 2022, outlines the details of the new tax measures.
In a bid to bolster the domestic media sector, the FBR has introduced advance tax on foreign-produced TV drama serials or plays that are dubbed in Urdu or any other language and broadcasted on local television channels. This initiative is aimed at encouraging the growth and sustainability of the local media industry.
Furthermore, the FBR has extended the scope of the advance tax to cover advertisements featuring foreign actors. The introduction of these taxes underscores the FBR’s commitment to supporting the national media landscape by addressing the influx of foreign content and its potential impact on the local industry.
The tax collected under this new section shall be treated as minimum tax, ensuring a streamlined and effective tax imposition process. The rates for the newly introduced taxes have been specified in Division XA of Part IV of the First Schedule to the Income Tax Ordinance, 2001, as follows:
1. Foreign Produced TV Drama Serial or Play (Per Episode): The rate of tax shall be Rs1,000,000.
2. Foreign Produced TV Play (Single Episode): The rate of tax shall be Rs3,000,000.
3. Advertisement Starring Foreign Actor (Per Second): The rate of tax shall be Rs500,000.
These rates are designed to reflect the varied nature of media content and ensure a fair and proportionate contribution from foreign-produced dramas and advertisements. The FBR’s decision to impose these taxes aligns with its strategy to strike a balance between fostering a competitive media landscape and safeguarding the interests of local content creators and actors.
The circular serves as a comprehensive guide for taxpayers, providing clarity on the new tax provisions introduced through the Finance (Supplementary) Act, 2022. The move is expected to have a positive impact on the domestic media industry, encouraging the production and promotion of indigenous content and contributing to the overall cultural and economic growth of the country.
As the FBR continues to adapt its tax policies to address emerging challenges and opportunities, the imposition of taxes on foreign-produced media content demonstrates a proactive approach to support and strengthen the local media landscape.
