IMF calls for Pakistan to tax digital currencies for $3 billion bailout package

The International Monetary Fund (IMF) has urged the Federal Board of Revenue (FBR) of Pakistan to impose Capital Gains Tax (CGT) on the sale of immovable properties by non-residents. This comes as part of IMF's efforts to enhance revenue collection in Pakistan and ensure a fair and equitable tax system. The aim of the CGT is to ensure that individuals and businesses alike contribute their fair share of taxes, promoting fiscal sustainability and economic growth. By implementing the CGT on non-residents, Pakistan can further strengthen its tax base and generate much-needed revenue for the country's development initiatives. This move aligns with IMF's recommendations for Pakistan to improve its fiscal position and address its economic challenges.

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The International Monetary Fund (IMF) has requested the Federal Board of Revenue (FBR) of Pakistan to impose capital gains tax (CGT) on cryptocurrency investments as a condition to receive $3 billion from the bailout fund.

The IMF also recommends Pakistan to adjust the tax rate on capital gains for real estate and listed securities. Additionally, property developers may have to adhere to stricter monitoring and reporting requirements, accompanied by hefty penalties for non-compliance, and ultimately the enforcement of new tax regulations in the real estate market.

Local reports also suggest that the IMF’s recommendations could become part of an upcoming bailout package under the Extended Fund Facility (EFF). Therefore, Pakistan’s budget for the fiscal year 2024–2025 may officially impose strict taxation on capital gains from cryptocurrencies.

The IMF’s $3 billion bailout aims to stabilize Pakistan’s hyperinflationary fiat economy from collapse, which is a direct result of political instability, natural disasters, and unstable governance, among many other issues.

The IMF’s four-day review process began on March 14, and approximately $1.1 billion will be disbursed if Pakistan agrees to the conditions.

The call for taxing cryptocurrency capital gains comes nearly a year after Aisha Ghaus Pasha (Finance and Revenue Minister) stated that the country would never legalize cryptocurrency transactions.

The cryptocurrency community in Pakistan has rejected the government’s ban on cryptocurrency transactions based on the IMF’s recommendation. Source: @Crypto_Pakistan on X

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