The International Monetary Fund (IMF) has recommended that Pakistan impose a Capital Gains Tax (CGT) on cryptocurrency investments as a prerequisite for receiving $3 billion in bailout funds. This suggestion comes as part of broader financial reforms, including stricter laws for real estate title transfers and capital gains taxation on listed securities, aimed at stabilizing Pakistan’s economy.
IMF’s Recommendations to Pakistan
During discussions on a $3-billion stand-by arrangement (SBA), the IMF emphasized the need for Pakistan’s Federal Board of Revenue (FBR) to implement taxes on crypto capital gains. The adjustment in tax rates aims to ensure the collection of yearly taxes on real estate assets, enhancing tax compliance and revenue for the country.
In addition to crypto taxation, property developers may face more rigorous tracking and reporting requirements, supported by substantial fines for non-compliance. These measures are intended to enforce new tax rules in the real estate market, contributing to the overall effort to increase tax revenue.
Crypto Taxation and AI Initiatives
The IMF’s recommendations could become part of Pakistan’s budget for the fiscal year 2024–2025, introducing strict crypto tax regulations. Despite previous statements from Aisha Ghaus Pasha, the minister of state for finance and revenue, against legalizing crypto trading, Pakistan is showing interest in technology and innovation by aiming to produce 1 million AI-trained IT graduates by 2027.
National AI Policy and Fund
Pakistan’s national AI policy draft outlines the country’s commitment to leveraging AI for public and national improvement, setting 15 targets with timelines ranging from 2023 to 2028. A National AI Fund will be established using underutilized resources from the Ministry of IT and Telecom to support these initiatives.
The IMF’s push for crypto taxation and financial reforms in Pakistan reflects a growing recognition of digital assets and their potential impact on global financial stability. As Pakistan navigates its economic challenges, the integration of technology and adherence to international financial standards will be crucial in securing the necessary bailout funds and fostering economic growth.
