The International Monetary Fund (IMF) has advised Pakistan to implement stricter tax regulations, including the taxation of capital gains from cryptocurrency investments, as part of the conditions to qualify for a $3 billion bailout.
During discussions regarding a $3 billion stand-by arrangement (SBA), the IMF recommended that Pakistan’s Federal Board of Revenue (FBR) impose taxes on cryptocurrency capital gains.
In addition to taxing crypto gains, Pakistan has been urged to review its taxation policies related to real estate and listed securities, according to local news outlet The News.
The proposed adjustments in tax rates are aimed at ensuring the collection of annual taxes on capital gains from real estate assets, regardless of whether the property is sold or retained by the owner.
Furthermore, property developers may face stricter tracking and reporting requirements, with significant fines for non-compliance, in an effort to enforce new tax regulations within the real estate sector.
These recommendations from the IMF may be incorporated into the upcoming bailout package under the Extended Fund Facility (EFF), potentially resulting in the official introduction of a stringent crypto tax on capital gains in Pakistan’s budget for FY2024-25.
The $3 billion IMF aid package seeks to stabilize Pakistan’s hyperinflated fiat economy, which has been facing challenges such as geopolitical tensions, natural disasters, and unstable governance.
The four-day IMF review commenced on March 14, with around $1.1 billion slated for disbursement if Pakistan agrees to adhere to the outlined conditions.
This call for taxing crypto capital gains comes nearly a year after Aisha Ghaus Pasha, the Minister of State for Finance and Revenue, declared that Pakistan would not legalize crypto trading.
In other efforts to spur economic development, Pakistan is focusing on artificial intelligence (AI), with the goal of producing one million AI-trained IT graduates by 2027.
To support these initiatives, Pakistan plans to establish a National AI Fund utilizing resources and funds from the Ministry of IT and Telecom. The country’s national AI policy draft outlines 15 targets to be achieved by 2023-2028, demonstrating Pakistan’s commitment to integrating AI for public and national advancement.
