ISLAMABAD: Pakistan is set to tax cryptocurrencies in the upcoming budget as the South Asian nation steps up efforts to tap into its growing digital assets market, two officials with direct knowledge of the matter said on Sunday.
Pakistan is increasingly positioning digital finance, artificial intelligence and information technology as key drivers of economic growth, seeking to formalize a large but previously unregulated cryptocurrency market.
In December last year, the Pakistan Virtual Assets Regulatory Authority (PVARA) granted no-objection certificates (NoCs) to two major global crypto exchanges, Binance and HTX, to bring virtual asset service providers (VASPs) under a formal licensing regime.
Requesting anonymity, officials told Arab News on Sunday that citizens in Pakistan, a country of 240 million people, will be able to legally trade cryptocurrencies within the next few months, following the formal issuance of licenses to the two exchanges.
“Since the budget will be for the entire fiscal year, we hope that the crypto tax regime will take effect sometime within the next few months when trading is officially legalized,” a government official with direct knowledge of the matter told Arab News, adding that cryptocurrencies will be taxed in the budget but a final decision on the tax ratio will be made at a meeting between PVARA, the International Monetary Fund (IMF) and Pakistani tax authorities on Monday.
Pakistan is currently bolstered by a 37-month, $7 billion IMF bailout, which is designed to stabilize macroeconomic conditions. The country’s move to formalize digital asset regulation aligns with broader economic reforms under the IMF program, which requires Islamabad to strengthen financial controls, improve transparency, and manage risks linked to emerging technologies.
In Feb., the Senate, the upper house of Pakistan parliament, passed the Virtual Assets Bill 2026 that paved the way for regulation and supervision of the digital assets sector to protect investors.
Reached for comment, an official of Pakistan’s Federal Board of Revenue (FBR) downplayed the development.
“Crypto is already taxable under the law. The mining of digital coins is treated as business income, and gains on sales are treated as capital gains,” he said, adding that the law does not explicitly enumerate every method of earning income.
“It simply taxes the income earned, just as there are separate methods for taxing income from the sale of sugar or steel.”
He, however, added: “Since the government has enacted a law to regulate crypto, we may add specific definitions and references to the PVARA Act in the tax law.”
Currently, Pakistanis trade cryptocurrencies outside any legal framework, but PVARA has verbally asked concerned government agencies to halt crackdowns on such trades as the country transitions into a formal regulatory regime, according to officials.
A third official, who also requested anonymity, said PVARA wants the tax rate on cryptocurrencies to be minimal to promote a legal business environment, whereas tax authorities are pushing for a high tax ratio keeping in view the higher revenue targets set by the IMF for the country.
It is unclear whether authorities intend to tax the overall profits gained from transactions or tax each transaction individually.
“This will be clearer after the Monday meeting,” the official said.
When asked about tracking the income sources and data of cryptocurrency traders, the official said once formal licenses are issued, exchanges will capture this data through mandatory ‘Know Your Customer’ (KYC) protocols.
Leave a comment