Pakistan (Commonwealth Union)_ Pakistan is planning to impose a tax on profits earned from cryptocurrency in the upcoming budget for the fiscal year 2026-2027, a major step to regulate the country’s growing digital asset market. Accordingly, government sources said the government is considering a capital gains tax of between 10% and 30% on profits made from cryptocurrency trading. The proposed move is aimed at bringing virtual assets under the formal tax net and generating a new revenue stream for the government. The move follows discussions with the International Monetary Fund (IMF), which has encouraged Pakistan to tax income generated through digital businesses and virtual assets.
Officials familiar with the matter said the IMF has specifically recommended the collection of capital gains tax on profits earned from cryptocurrency transactions. To support the new tax regime, the government is reviewing amendments to the Income Tax Ordinance, 2001. A new section, likely to be introduced as Section 37C, is being considered to provide a legal basis for taxing gains from cryptocurrency trading. If approved, it would mark the first time that profits from crypto-related activities are formally incorporated into the country’s income tax regime. Government estimates suggest that around nine million Pakistanis actively use cryptocurrencies. However, the wider digital asset market, which includes other forms of virtual assets, could involve between 20 million and 40 million people across the country.
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Officials believe the proposed tax could generate billions of rupees in additional revenue each year. To support policy development, the government has tasked the proposed Pakistan Virtual Asset Regulatory Authority with recommending taxation measures for digital asset users. The taxation plan is part of an effort to create a regulated environment for cryptocurrencies and digital assets in Pakistan, and a separate committee has been established to study user activity, transaction volumes and practical methods for tax collection, sources say. Additionally, the State Bank is moving towards recognizing virtual assets under a regulated framework and is also exploring the creation of a digital currency ecosystem, sources say.
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Under the proposed model, users would be able to convert Pakistani rupees into digital currency and use those funds to purchase approved virtual assets. Cryptocurrency transactions would be allowed through authorized channels, although digital assets would not be permitted as a payment method for goods and services outside the regulated system. Officials say a legal framework governing cryptocurrency activities has already been drafted, and licensed operators would be authorized to participate in the emerging digital asset sector. The proposed tax measures are expected to be formally announced when the federal budget for FY2026-2027 is presented later this month.
