IMF wants Pakistan to tax crypto gains to pay for $3B bailout
The International Monetary Fund (IMF) has asked the Federal Board of Revenue (FBR) of Pakistan to charge Capital Gains Tax (CGT) on cryptocurrency investments as one of the requirements to qualify for $3 billion in bailout funds.
During the review talks around a $3 billion stand-by arrangement (SBA), the IMF recommended Pakistan’s federal law enforcement agency, FBR, impose taxes on crypto capital gains.
The country has also been asked to review the taxation of real estate and listed securities, according to local news outlet The News.
The adjustment in tax rates, as recommended by the IMF, aims to collect yearly taxes on capital gains on real estate assets, irrespective of whether the owner chooses to sell or retain the property.
Additionally, property developers could have to comply with stricter tracking and reporting requirements, which will be supported by hefty fines for non-compliance, ultimately enforcing new tax rules in the real estate market.
Local reports also suggest that the recommendations made by the IMF could become part of the upcoming bailout package under the Extended Fund Facility (EFF). As a result, Pakistan’s budget for FY2024-25 could officially introduce a stringent crypto tax on capital gains.
The $3 billion IMF aid aims to stabilize the hyperinflated fiat economy of Pakistan from a debt default, which was a direct result of geopolitical tensions, natural calamities and unstable national governance, among others.
Related: Pakistan banks agree on blockchain-based KYC system development
The four-day IMF review began on March 14, and around $1.1 billion will be disbursed if Pakistan agrees to the conditions.
The call for taxing crypto capital gains comes nearly one year after Aisha Ghaus Pasha, the Minister of State for Finance and Revenue, said the country would never legalize crypto trading.
Pakistan is betting on artificial intelligence (AI), aiming to produce one million AI-trained IT graduates by 2027.
The policy framework showcases Pakistan’s willingness to integrate AI for public and national betterment. The country has set 15 targets, with timelines ranging from 2023 to 2028.
To support these initiatives, Pakistan intends to establish a National AI Fund by using the Ministry of IT and Telecom’s “underutilized resources and funds.”
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