The International Monetary Fund (IMF) has requested the Pakistan Federal Revenue Board (FBR) to impose Capital Gains Tax (CGT) on cryptocurrency investments as a condition for a $3 billion bailout fund. During the review discussions for the $3 billion stand-by arrangement (SBA), the IMF advised that Pakistan’s federal law enforcement agency FBR should tax crypto capital gains.
IMF’s Noteworthy Recommendation
According to the local news source The News, the country was also asked to review the taxation of real estate and securities traded on the stock exchange. The IMF-recommended tax rate adjustments aim to collect annual taxes on capital gains from real estate assets, regardless of whether the owner chooses to sell or hold the property.
In addition, real estate developers might have to comply with stricter monitoring and reporting requirements, and non-compliance could be enforced with heavy fines to implement new tax rules in the real estate market.
Local reports also suggest that the IMF’s recommendations could be part of the upcoming bailout package under the Extended Fund Facility (EFF). Consequently, Pakistan’s 2024-2025 fiscal year budget could officially introduce stringent crypto taxes for capital gains. The $3 billion IMF assistance aims to stabilize Pakistan’s hyperinflationary fiat economy, which is a direct result of debt default due to geopolitical tensions, natural disasters, and unstable national governance.
Pakistan and Its Artificial Intelligence Initiative
The four-day IMF review began on March 14, and Pakistan will receive approximately $1.1 billion if it agrees to the terms. The call for taxing crypto capital gains comes about a year after the Minister of State for Finance and Revenue Aisha Ghaus Pasha stated that the country would never legalize crypto transactions.
Pakistan is setting a significant goal in artificial intelligence by aiming to produce one million IT graduates trained in AI by 2027.
The policy framework highlights Pakistan’s desire to integrate artificial intelligence for public and national improvement. The country has set 15 goals with varying timelines between 2023 and 2028. To support these initiatives, Pakistan plans to establish a National Artificial Intelligence Fund using underutilized resources and funds from the Ministry of IT and Telecommunication.
