ISLAMABAD (Kashmir English): The federal government has proposed to impose capital gains tax (CGT) on profits from cryptocurrency trading to bring crypto transactions into the tax net in the Budget 2026-27.
According to the informed sources, a capital gains tax ranging from 10 to 30 per cent can be imposed on crypto trading, although a final decision has yet to be made on Friday.
Sources said that after consultation with the International Monetary Fund (IMF), the government has finalised the plan to bring the crypto sector into the tax net.
A high-level government committee has recommendations covering both taxation and documentation of cryptocurrency transactions, including mechanisms to identify and regulate unregistered market participants.
As per the sources, the IMF has demanded tax on gains from all digital businesses, including collecting capital gains tax on crypto transactions.
Inclusion in Income Tax Ordinance, 2001
Sources added that a capital gains clause related to crypto transactions is likely to be included in Section 37 of the Income Tax Ordinance, 2001.
As per sources, around 9 million people in Pakistan use cryptocurrencies and the government expects to earn billions of rupees in additional revenue from crypto transactions, and profits from crypto trading may soon come under the purview of tax.
Sources further said that the Pakistan Virtual Asset Regulatory Authority was instructed to propose tax measures for crypto users, while a committee was also formed to review the number of crypto users, transactions, and tax mechanisms.
A few months ago, the central bank decided to legalize virtual assets and introduce digital currency. Under this move, it will be possible to purchase virtual assets by converting Pakistani rupees into digital currency, while the money in the form of Pakistani rupees can also be exchanged for cryptocurrency.
According to sources, virtual assets will not be able to be used for purchases of goods, services, or services outside the ecosystem, while digital currency will only be issued to offices established in Pakistan for virtual assets.
The sources further added that a legal framework for cryptocurrency has also been prepared.
