The Federal Board of Revenue (FBR) has initiated consultations with experts to draft legislation aimed at formally introducing cryptocurrency into Pakistan’s financial and tax systems. The move follows directives from the Federal Tax Ombudsman (FTO), who urged the authority to clarify its tax stance on digital currencies and address the growing unregulated crypto market.
According to official documents, the FBR is exploring legal frameworks to tax profits generated from cryptocurrency transactions and the assets created through digital currency investments. The Policy Wing has confirmed that discussions are underway to design a mechanism in line with international best practices.
Pakistan, home to nearly nine million crypto users, ranks as the sixth-largest adopter of digital currencies globally. However, despite its rising popularity, the State Bank of Pakistan (SBP) has not yet legalised cryptocurrencies. While an SBP circular issued in 2018 warned against the risks of virtual currencies, it did not declare them illegal.
The FTO expressed concern that massive crypto transactions are being conducted outside Pakistan’s tax framework, calling it a “sign of neglect and inattention” by authorities. It stressed that without regulation, profits and assets from crypto dealings will remain undocumented and untaxed, missing a key revenue opportunity.
Globally, institutions such as the Financial Crimes Enforcement Network classify crypto miners as money transmitters, bringing them under existing financial laws. The FTO has recommended that Pakistan adopt similar standards and integrate cryptocurrency provisions into the upcoming Finance Bill.
Experts believe that regulating this sector could help broaden Pakistan’s tax base, enhance transparency, and reduce revenue leakages. The FBR has been urged to engage all stakeholders, including the complainant, financial experts, and policymakers, to ensure comprehensive and effective legislation.
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