IMF Urges Pakistan to Impose Crypto Taxes for Bailout

The Federal Board of Revenue (FBR) in Pakistan has received a critical proposal from the International Monetary Fund (IMF): a capital gains tax (CGT) on cryptocurrency investments should be imposed. In order to be eligible for a substantial $3 billion bailout package, Pakistan must first approve this plan.

When the IMF was talking about a $3 billion stand-by agreement (SBA), they emphasized how crucial it is to tax cryptocurrency capital gains in order to support Pakistan’s economic stability. Pressure to implement tax policies that target profits from bitcoin transactions is applied to the FBR by the IMF’s proposal.

Broadening the Tax Base

In addition to cryptocurrency investments, the IMF has demanded that Pakistan’s tax laws pertaining to real estate and listed stocks be thoroughly reviewed. The intended changes are meant to guarantee a larger tax base and improve government revenue collection.

The proposed reforms call for annual taxes to be levied on capital gains from real estate holdings, regardless of the owner’s decision to sell or keep the property. Furthermore, property developers are to be subject to strict reporting and tracking procedures, with severe penalties for noncompliance. With these actions, Pakistan’s real estate industry is about to enter a new age of tax control.

As per reports, the suggestions made by the IMF are expected to be included in the next bailout package that will be provided by the Extended Fund Facility (EFF). Therefore, the official adoption of strict tax regulations targeting bitcoin capital gains may be included in Pakistan’s budgetary plan for the 2024–2025 fiscal year. IMF and FSB have previously asked users to think again on Blanket Bans on Crypto.

Pakistan’s economic volatility, which is made worse by things like natural catastrophes, geopolitical conflicts, and problems with governance, is the target of the $3 billion IMF bailout package. The aim of the bailout is to create a path towards sustainable economic recovery by stabilizing the hyperinflated fiat economy and preventing the possibility of debt default.