The Federal Board of Revenue (FBR) has initiated consultations with experts to draft legislation on cryptocurrency regulation and taxation in Pakistan. The move aims to bring crypto-related transactions under the formal tax net and address the growing digital asset economy in the country.
This development comes after a directive from the Federal Tax Ombudsman (FTO), which received a complaint seeking clarity on FBR’s tax policy regarding cryptocurrencies. The FTO emphasized the urgent need to regulate the sector, citing that Pakistan has nearly 9 million crypto users, making it the 6th largest adopter globally among 560 million users.
While the State Bank of Pakistan (SBP) had earlier issued a circular in April 2018 warning of the risks of virtual currencies, it did not declare them illegal. Since then, Pakistan’s crypto market has expanded rapidly, drawing increasing participation from both retail and institutional investors.
The FTO expressed concern that major crypto transactions are being conducted outside the tax framework, terming it “a height of neglect and inattention” by the authorities. The notice highlighted that profits and assets generated from crypto trading remain undocumented and untaxed, urging the FBR to introduce clear legal provisions to capture this potential revenue stream.
“This newly emerging financial avenue can help the government ease its revenue constraints if properly regulated and taxed,” stated the FTO in its report.
The FBR’s Policy Wing confirmed that consultations are ongoing with technical experts to propose legal amendments, likely to be included in the upcoming Finance Bill. The initiative is expected to broaden the tax base, promote transparency, and align Pakistan with international best practices, such as those under the Financial Crimes Enforcement Network (FinCEN), where crypto miners are considered money transmitters subject to financial laws.
Once formalized, the legislation could mark a major milestone in integrating Pakistan’s fast-growing digital economy into its formal financial and taxation system