ISLAMABAD – The government is likely to bring cryptocurrency transactions into the tax net in the upcoming budget by imposing a capital gains tax on profits earned through crypto trading.
According to reports, a capital gains tax ranging from 10% to 30% may be introduced on crypto trading profits. The proposal is reportedly being considered in consultation with the International Monetary Fund (IMF), as part of broader efforts to expand the tax base.
Reports said the IMF has urged Pakistan to tax gains generated from all forms of digital businesses and has also proposed the collection of capital gains tax on cryptocurrency transactions.
To facilitate the move, the government is considering amending Section 37 of the Income Tax Act, 2001, by adding a new clause—Section 37C—to specifically cover capital gains arising from crypto transactions.
Officials estimate that around nine million people in Pakistan use cryptocurrencies. The government expects to generate billions of rupees in additional revenue if profits from crypto trading are brought under the tax regime.
Reports further revealed that the Pakistan Virtual Asset Regulatory Authority had been directed to propose tax measures for crypto users. A committee was also established to review the number of crypto users, transaction volumes, and the mechanism for tax collection.
A few months ago, the central bank reportedly decided to grant legal status to virtual assets and introduce a digital currency framework. Under the proposed system, the Pakistani rupee could be converted into a digital currency for the purchase of virtual assets, while funds held in rupees could also be exchanged for cryptocurrencies.
However, reports said virtual assets would not be permitted for the purchase of goods and services outside the designated ecosystem. The proposed digital currency would be issued only to offices established in Pakistan for virtual asset-related activities.
Web Desk
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