ISLAMABAD: The government is preparing to impose a capital gains tax on cryptocurrency transactions in the upcoming Budget 2026-27, with rates likely to range between 10% and 30%, sources said.
According to sources, the move is being considered following consultations with the International Monetary Fund (IMF), which has called for gains earned through digital businesses and cryptocurrency transactions to be brought into the tax net. The IMF has specifically urged Pakistan to introduce a mechanism for collecting capital gains tax on crypto-related transactions, sources added.
As part of the proposed measures for Budget 2026-27, authorities are considering amendments to Section 37 of the Income Tax Act, 2001. Sources said a new Clause 37C could be introduced to enable the collection of capital gains tax on profits generated through cryptocurrency transactions.
The government expects the proposed tax measures to generate billions of rupees in additional revenue. Sources said profits earned through crypto trading could soon become taxable as authorities move to formalize the sector.
According to sources, Pakistan Virtual Asset Regulatory Authority had previously been directed to propose taxation measures for cryptocurrency users. A committee was also established to assess the number of crypto users, transaction volumes and possible tax collection mechanisms.
Sources estimate that around 9 million people in Pakistan currently use cryptocurrencies. However, the total number of individuals dealing in digital assets is believed to be significantly higher, ranging between 20 million and 40 million users.
Sources further said that a few months ago the central bank decided to legalize virtual assets and introduce a digital currency framework. Under the proposed system, Pakistani rupees could be converted into digital currency for the purchase of virtual assets. Existing funds held in Pakistani rupees would also be exchangeable into cryptocurrency, sources added.
However, virtual assets would not be permitted for the purchase of goods and services outside the designated ecosystem. Sources said the digital currency would be issued to offices established in Pakistan for virtual asset-related activities.
Sources maintained that a legal framework for cryptocurrency has already been prepared, paving the way for broader regulation and taxation of the sector. If approved, the proposed measures in Budget 2026-27 would mark a major step toward integrating Pakistan’s cryptocurrency market into the formal tax system.
