Karachi, May 11, 2025 – Pakistan is likely to introduce a Capital Value Tax (CVT) on crypto assets held by resident citizens, as the government moves toward formalizing regulation for digital currencies.
According to sources within the Federal Board of Revenue (FBR), the absence of a clear legal framework for cryptocurrencies has so far prevented the taxation of these digital assets, but new legislation is expected soon.
The FBR sources noted that, until specific laws are enacted, the taxation treatment of crypto remains undefined. However, one of the options under consideration is the implementation of CVT, similar to the one already applicable to foreign assets of resident taxpayers. If adopted, this move would mark Pakistan’s first direct tax policy specifically targeting crypto assets.
In a significant step toward digital policy reform, the government has already launched the Pakistan Crypto Council, aimed at establishing a direct channel between the government and the public to shape policies around cryptocurrency and blockchain technology. The council seeks to position Pakistan as a forward-thinking nation in digital governance and to foster public trust through transparent engagement.
Meanwhile, the Institute of Cost and Management Accountants of Pakistan (ICMAP) has urged the government to define tax treatment for crypto transactions. Their recommendations include defining capital gains and income tax rules, mandating the reporting of large crypto transactions to the FBR, and introducing tax incentives for blockchain startups to boost innovation and foreign investment.
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has also been vocal in advocating for a comprehensive regulatory and taxation framework. Citing data from Chainalysis, the FPCCI highlighted that Pakistan ranked third in the Global Crypto Adoption Index in 2021, with an estimated $20 billion in crypto assets traded by Pakistani investors during 2020-21.
To integrate these digital assets into the formal economy, the FPCCI proposed a multi-tiered tax structure, including a 1% adjustable tax on crypto transactions and a one-time asset declaration scheme. This would allow for encashment and conversion of cryptocurrencies under various tax brackets, ranging from 0% to 15%, depending on the holding structure and investor status.
The FPCCI emphasized that countries such as India, Thailand, Malaysia, and the UAE have already brought crypto assets under their tax regimes, thereby expanding their revenue base. A similar approach in Pakistan, the FPCCI argues, could help unlock substantial tax revenue while ensuring financial transparency in the evolving digital economy.