The International Monetary Fund (IMF) has requested that the Federal Board of Revenue (FBR) in Pakistan impose a Capital Gains Tax (CGT) on investments in cryptocurrency in order to meet the criteria for receiving $3 billion in bailout funds.
During the discussions regarding a $3 billion stand-by arrangement (SBA), the IMF suggested that the FBR in Pakistan implement taxes on capital gains from cryptocurrencies. As reported by local news outlet The News, the country has also been advised to review the taxation of real estate and listed securities.
The recommended adjustment in tax rates by the IMF is aimed at collecting annual taxes on capital gains from real estate assets, regardless of whether the owner chooses to sell or retain the property. In addition, property developers may be required to comply with stricter tracking and reporting regulations, which will be enforced through significant fines for non-compliance. These measures are intended to establish new tax rules in the real estate market.
According to local reports, these 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 the fiscal year 2024-2025 may officially introduce a strict cryptocurrency tax on capital gains.
The $3 billion in IMF aid aims to stabilize Pakistan’s hyperinflated fiat economy and prevent a debt default, which was primarily caused by geopolitical tensions, natural disasters, and unstable national governance, among other factors.
The four-day IMF review, which began on March 14, will result in the disbursement of approximately $1.1 billion if Pakistan agrees to the conditions set by the IMF.
The call for taxing capital gains from cryptocurrencies comes nearly a year after Aisha Ghaus Pasha, the Minister of State for Finance and Revenue, stated that the country would never legalize crypto trading.
However, the crypto community in Pakistan has challenged the government’s decision to ban crypto trading based on the IMF’s recommendation.
Pakistan is also placing its bets on artificial intelligence (AI), with the goal of producing 1 million IT graduates trained in AI by 2027.
The country’s national AI policy draft demonstrates its 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 by utilizing the Ministry of IT and Telecom’s underutilized resources and funds.