Pakistan plans capital gains tax on cryptocurrency transactions in Budget 2026-27

ISLAMABAD: The federal government is planning to impose a capital gains tax (CGT) ranging from 10% to 30% on cryptocurrency transactions in the upcoming fiscal year 2026-27 budget.

The move comes as authorities seek to bring the crypto sector into the tax net following consultations with the International Monetary Fund (IMF).

Sources said the IMF has urged Pakistan to tax profits generated from all digital businesses, including cryptocurrency transactions.

The government is likely to amend Section 37 of the Income Tax Ordinance, 2001, by introducing a new clause, Section 37C, specifically covering capital gains arising from crypto transactions.

Sources said nearly nine million people currently use cryptocurrencies in Pakistan, and the government expects to generate billions of rupees in additional revenue through the proposed tax.

The profits earned from crypto trading may soon fall under the formal tax regime, they added.

Sources further revealed that the Pakistan Virtual Asset Regulatory Authority (PVARA) had been directed to propose taxation measures for crypto users.

A committee was also constituted to assess the number of users, transaction volumes and an appropriate taxation mechanism for the sector.

The number of individuals dealing in digital assets in Pakistan is estimated to range between 20 million and 40 million, according to sources.

A few months ago, the State Bank of Pakistan decided to legalise virtual assets and introduce a digital currency framework.

Under the proposed system, users would be able to convert Pakistani rupees into digital currency for the purchase of virtual assets and exchange local currency for cryptocurrencies.

However, virtual assets would not be permitted for purchasing goods or services outside the approved ecosystem, sources said.

The proposed digital currency would be issued to entities operating within Pakistan’s virtual asset ecosystem, while a legal framework governing cryptocurrency and digital assets has already been prepared, the sources added.