During a discussion with journalists on the role of cryptocurrencies in Pakistan’s economy, officials said that the country could potentially generate $90 million per year by imposing a 15% tax on crypto trading under hard-and-fast regulations.
To bring a better tax structure
On Tuesday, Country General Manager Rain Financial Inc, Zeeshan Ahmed, said that the United States and its rival country, India, are collecting billions of dollars by a 30% tax imposition on the income earned from crypto investments. Notably, the total crypto transactions in Pakistan hit the $20 billion mark in 2021, out of which the earned profit was around $650 million.
Aatiqa Lateef, the Director of Public Policy at Rain Financial Inc., stood alongside Ahmed. According to Lateef, Pakistan stands out among emerging market players in the crypto sector. It has been at third position in Chainalysis 2021 Global Crypto Adoption Index by growing 711% in 2020-2021.
“We are in constant touch with all regulators, including SBP, PTA, FBR, and others and will be ready to assist them,” Ahmed said, adding that the government had formed committees to discuss various scenarios and develop a policy to regulate cryptocurrency as an asset or currency.
Ahmed said that the Pakistani government might take 12-18 months to decide on the taxation law. He added that for proper security, the crypto transactions “should be treated as legal and placed under regulations following which they can consider barring conversion from Crypto into rupee account outside the country.”
Pakistan rushing for clear crypto regulations
Pakistan, which has been reluctant to work with crypto companies due to a lack of clear regulations, has recently introduced three sub-committees to decide the crypto companies’ future in the nation. The three sub-panels are set to formulate their recommendations, including legal status determination, after evaluating the pros and cons of digital assets.