The IMF is calling on Pakistan to increase taxation on crypto profits to secure a $3 billion bailout for its struggling economy.
According to the latest report, Pakistan's cryptocurrency industry is worth nearly $20 million. As of 2023, the country ranks among the top five highest crypto investors in the world, with 15 million of its population actively owning cryptocurrencies.
In negotiations over a $3 billion standby agreement with the IMF, financial institutions recommended that Pakistan's Federal Board of Revenue (FBR) expand the scope of capital gains tax (CGT) to include virtual currency transactions. The IMF is also proposing to reassess the tax classification of real estate and listed securities to ensure that all gains are taxed regardless of ownership period.
Under the proposed guidelines, real estate developers in Pakistan will be required to record and declare all transfers of real estate interests before final determination and formal registration of real estate ownership. Violation of these regulations can result in fines, including secondary liability for unpaid taxes. This initiative aims to regulate the common practice of zoning file transactions in housing projects.
After Pakistan accepts the terms, the IMF plans to release the remaining portion of last summer's bailout deal, about $1.1 billion. This agreement prevented Pakistan from defaulting on its national debt.
