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IMF task Pakistan to collect tax on crypto gains

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IMF
IMF

The International Monetary Fund (IMF) has directed Pakistan to place a Capital Gains Tax (CGT) on cryptocurrency investments as a prerequisite to qualify for a $3 billion bailout.

The directive was issued to Pakistan’s Federal Board of Revenue during a discussion for the $3 billion stand-by arrangement (SBA).

As part of the conditions, Pakistan has also been urged to reassess the taxation framework for real estate and listed securities, reports The News, a local media outlet.

The proposed adjustments in tax rates are aimed at ensuring the collection of annual taxes on capital gains from real estate assets, regardless of whether the property is sold or retained.

Furthermore, property developers may face enhanced tracking and reporting requirements, accompanied by substantial fines for non-compliance, thereby enforcing stricter tax regulations within the real estate sector.

According to local sources, these IMF recommendations could potentially be incorporated into the forthcoming bailout package under the Extended Fund Facility (EFF). Consequently, Pakistan’s fiscal budget for the 2024–2025 financial year might officially introduce stringent taxation on crypto capital gains.

The $3 billion IMF aid seeks to stabilize Pakistan’s hyperinflated fiat economy and mitigate the risk of debt default, a consequence of various factors including geopolitical tensions, natural disasters, and internal governance challenges.

This call for taxing crypto capital gains comes nearly a year after Aisha Ghaus Pasha, the Minister of State for Finance and Revenue, asserted that Pakistan would not legalize crypto trading.

The crypto community in Pakistan has challenged the government’s stance on banning crypto trading, particularly in light of the IMF’s recommendation. Source: @Crypto_Pakistan on X

In parallel, Pakistan is embracing artificial intelligence (AI) initiatives, with a goal to produce 1 million AI-trained IT graduates by 2027.

A glimpse of Pakistan’s national AI policy draft underscores the country’s commitment to leveraging AI for societal and national advancement. The policy outlines 15 targets to be achieved by 2023 to 2028.

To facilitate these endeavors, Pakistan plans to establish a National AI Fund, utilizing resources and funds available within the Ministry of IT and Telecom.

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