IMF Urges Pakistan to Impose Taxes on Cryptocurrency Profits to Fund $3B Bailout

The International Monetary Fund (IMF) has requested that the Federal Board of Revenue (FBR) in Pakistan impose Capital Gains Tax (CGT) on cryptocurrency investments in order to qualify for $3 billion in bailout funds.
As part of the review talks for a $3 billion stand-by arrangement (SBA), the IMF has recommended that the FBR in Pakistan enforce taxes on cryptocurrency capital gains. The IMF has also urged the country to review the taxation of real estate and listed securities, as reported by The News, a local news outlet.
The suggested adjustment in tax rates aims to collect annual taxes on capital gains from real estate assets, regardless of whether the owner chooses to sell or keep the property. Property developers may also be subjected to stricter tracking and reporting requirements, with heavy fines for non-compliance, in order to enforce new tax regulations in the real estate market.
Local reports indicate that these IMF recommendations may become part of the upcoming bailout package under the Extended Fund Facility (EFF). Consequently, Pakistan’s budget for the fiscal year 2024-2025 may officially introduce a strict capital gains tax on cryptocurrency.
The $3 billion in IMF aid is intended to stabilize Pakistan’s hyperinflated fiat economy and prevent a debt default, which was caused by geopolitical tensions, natural disasters, and unstable national governance, among other factors.
The four-day IMF review began on March 14, and if Pakistan agrees to the conditions, around $1.1 billion will be disbursed.
The call for taxing crypto capital gains comes almost a year after Aisha Ghaus Pasha, the Minister of State for Finance and Revenue, stated that the country would never legalize cryptocurrency trading.
The crypto community in Pakistan has challenged the government’s decision to ban crypto trading based on the IMF’s recommendation.
Pakistan is placing its bets on artificial intelligence (AI) and aims to generate 1 million IT graduates trained in AI by 2027.
The country’s national AI policy draft showcases Pakistan’s commitment to integrating AI for the betterment of the public and the nation. Pakistan has set 15 targets with timelines ranging from 2023 to 2028.
To support these initiatives, Pakistan plans to establish a National AI Fund using the Ministry of IT and Telecom’s underutilized resources and funds.