The federal government is preparing to bring cryptocurrency transactions into the tax net through Budget 2026-27, marking a major step toward regulating Pakistan’s rapidly growing digital asset market. According to sources, the proposed framework has been developed after consultations with the International Monetary Fund (IMF) and is expected to introduce a capital gains tax (CGT) on profits earned from cryptocurrency trading.
Under the proposal, gains generated from the sale and trading of cryptocurrencies could be taxed at rates ranging between 20 percent and 30 percent. While the final rate is yet to be announced, officials say the move aims to expand the scope of Section 37 of the Income Tax Ordinance, 2001, which currently governs capital gains taxation.
A high-level government committee has reportedly finalized recommendations covering both taxation and documentation of cryptocurrency transactions. The proposed framework would also include measures to identify unregistered participants and bring digital asset activities under a formal regulatory structure.
Authorities believe the taxation of crypto gains is one of the easier aspects of the broader regulatory plan because such transactions are comparable to securities trading. The initiative is intended to ensure that growing investment in digital assets contributes to national revenues while maintaining balance with traditional investment sectors.
According to a report submitted by the Federal Tax Ombudsman (FTO) to the Federal Board of Revenue (FBR), Pakistan is among the world’s leading countries in cryptocurrency adoption, with an estimated nine million users. The report highlighted concerns that a significant volume of cryptocurrency-related transactions currently takes place outside the country’s documented tax system.
Experts have emphasized the need for a balanced approach. While regulation and taxation are viewed as necessary steps, policymakers must avoid creating conditions that could discourage innovation or push investors toward offshore markets. Discussions are also underway regarding the taxation of cryptocurrency mining, staking rewards, decentralized finance (DeFi) activities, non-fungible tokens (NFTs), and token offerings, which present additional regulatory challenges.
