Wednesday, July 24, 2024

IMF Urges Pakistan to Tax Cryptocurrencies, Real State Businesses

The International Monetary Fund (IMF) has advised Pakistan to broaden the scope of its Capital Gains Tax (CGT) by incorporating cryptocurrencies into the tax framework, as part of recommendations aimed at enhancing revenue collection.

The IMF’s proposal also entails a review of tax slabs for real estate and listed securities to ensure comprehensive taxation of all gains, irrespective of the duration of asset ownership.

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Read also: IMF Urges Pakistan to End Cheap Gas Subsidies to Fertilizer Plants

Moreover, the IMF has urged the Federal Board of Revenue (FBR) to mandate property developers to monitor and report all property transfers prior to completion and registration of property titles. Failure to comply with these regulations may lead to the imposition of penalties. This aims to bring the prevalent practice of trading property files within housing schemes under the tax net.

These recommendations, outlined in the IMF’s technical assistance report, are anticipated to be integrated into Pakistan’s upcoming fiscal policies, potentially forming part of the Extended Fund Facility (EFF) bailout package. The FBR could be mandated to incorporate these measures into the next fiscal year’s budget through the finance bill for FY2024-25.

The IMF emphasizes the necessity of strengthening the taxation of capital gains, suggesting the inclusion of new asset classes like cryptocurrencies within the CGT ambit. Additionally, it advocates for taxing capital gains on real estate and listed securities without time-based exemptions.

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To bolster the taxation framework, the IMF proposes amendments to broaden the definition of “personal moveable property” in the Income Tax Ordinance, ensuring comprehensive coverage of investment assets. Furthermore, it advocates for revising tax slabs on real estate and listed securities to ensure equitable taxation of capital income, eliminating provisions exempting capital gains based on asset holding duration.

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Zain is a dynamic business student with a passion for technology that goes beyond the classroom. When he's not immersed in his studies, Zain can be found playing with the latest gadgets, fueled by a genuine curiosity for emerging tech trends. His love for technology extends to his avid reading habits, where he stays updated on the latest advancements and breakthroughs in the tech world. Despite his academic focus, Zain is also an outdoor enthusiast, always ready for an adventure. With several years of experience in writing news, Zain brings a unique blend of business acumen, tech-savviness, and journalistic expertise to any discussion or project.

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