IMF Urges Pakistan to Implement Taxation on Cryptocurrency Transactions

The International Monetary Fund (IMF) has urged Pakistan to expand its taxation framework to include digital assets such as cryptocurrencies. In the latest discussions surrounding the $3 billion Stand-By Arrangement, the IMF recommended that the Federal Board of Revenue (FBR) integrate cryptocurrencies into the Capital Gains Tax (CGT) regime to ensure a more comprehensive taxation system. 


This initiative not only targets cryptocurrencies but also suggests a reevaluation of CGT rates for real estate and publicly traded securities, aiming for a uniform taxation mechanism across different asset classes. The IMF highlighted the difficulties Pakistani authorities face in taxing real estate transactions due to informal registration practices and suggested measures to enhance compliance and reduce unregistered transfers. 


These proposals are expected to be part of Pakistan’s next financial package under the Extended Fund Facility (EFF) and could be incorporated into the FBR’s plans for the FY 2024-25 budget. Additionally, the IMF’s recommendations include revising tax policies on pensions, eliminating certain tax exemptions, and standardizing tax rates to simplify the tax system and align Pakistan’s practices with regional and global standards.