Chartered accountants propose comprehensive regulation and taxation framework for cryptocurrencies in Budget 2026-27 to expand tax base and improve oversight.
The Institute of Chartered Accountants of Pakistan (ICAP) has urged the government to introduce a comprehensive taxation and regulatory framework for crypto assets in the upcoming Budget 2026-27, citing rapid growth in digital asset adoption and the need for stronger financial oversight.
In its budget proposals, ICAP said cryptocurrencies and other digital assets are gaining global traction, including in Pakistan, where rising participation in crypto markets has created an urgent need for a clear legal and tax structure.
The institute said formal regulation would enhance transparency, help curb illicit financial flows, and generate additional revenue for the state.
Proposal for Dedicated Crypto Tax Framework
ICAP has recommended that crypto assets be officially recognized as a distinct asset class under the Income Tax Ordinance, 2001.
It proposed the introduction of a dedicated taxation and regulatory regime covering the acquisition, trading, holding and disposal of digital assets.
According to ICAP, a structured framework would provide legal certainty for investors and businesses while ensuring crypto-related transactions are properly recorded and brought into the tax net.
Untapped Revenue Potential
The institute noted that crypto assets represent a fast-growing but largely undocumented segment of Pakistan’s economy.
Despite increasing public participation in digital asset markets, ICAP said the absence of a taxation mechanism means the sector contributes minimally to the national exchequer.
It argued that formalizing crypto taxation could unlock a new revenue stream at a time when policymakers are focused on expanding the tax base and improving fiscal stability.
Regulatory and Financial Risks
ICAP also warned that the absence of oversight creates risks including tax evasion, money laundering, illicit financial flows and capital flight.
It added that regulatory uncertainty discourages legitimate investment and slows innovation in the digital economy.
The institute said a comprehensive legal framework would help strike a balance between encouraging technological growth and protecting the financial system from misuse.
ICAP further emphasized that a transparent and predictable policy environment for crypto assets would allow Pakistan to benefit from global growth in digital finance while ensuring investor protection and regulatory compliance.
