The government is preparing to bring Pakistan’s growing cryptocurrency market under a formal tax framework, with proposals under consideration to impose a capital gains tax ranging from 15 to 30 percent on crypto trading. The move is expected to become part of the upcoming federal budget and reflects broader efforts to regulate digital financial activities while increasing tax revenues from emerging sectors.
Officials familiar with the process say the proposal is being developed alongside ongoing discussions with the International Monetary Fund (IMF), which has encouraged stronger taxation of profits generated through digital businesses. As a result, authorities are exploring ways to ensure that gains from cryptocurrency transactions are reported and taxed under the country’s existing fiscal system.
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Under the proposed mechanism, profits earned through crypto trading could be formally recognized as taxable income through amendments to the Income Tax Ordinance. In particular, authorities are considering adding a crypto-related capital gains provision to Section 37, a step that would provide a clear legal basis for taxing digital asset transactions and integrating them into the national tax structure.
Meanwhile, the Virtual Asset Regulatory Authority has recommended a range of measures aimed at monitoring and regulating the cryptocurrency sector. A dedicated committee has also been established to evaluate the number of crypto users, estimate transaction volumes, and determine the most effective taxation model. These assessments are expected to help policymakers design a practical and enforceable regulatory framework.
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At the same time, officials are moving forward with plans to recognize virtual assets within a regulated legal framework, paving the way for the introduction of a digital currency system. Under the proposed arrangement, users may be allowed to convert Pakistani rupees into digital currency for purchasing virtual assets, creating a more structured environment for crypto-related activities.
The proposed reforms signal a significant shift in Pakistan’s approach to digital finance and cryptocurrency regulation. By bringing crypto profits into the tax net and establishing clearer legal guidelines, the government aims to improve transparency, strengthen financial oversight, and align the country’s digital economy with evolving international regulatory and fiscal standards.