Crypto to be Taxed in Pakistan? FTO Pushes FBR to Act on $1.6B Untapped Market
The Federal Tax Ombudsman (FTO) has issued strong remarks against the Federal Board of Revenue (FBR) for its failure to regulate the booming cryptocurrency sector in Pakistan. In a detailed judgment on Complaint No. 1919/ISB/IT/2025, the FTO described FBR’s conduct as a case of “maladministration,” calling it a missed opportunity to bring a high-growth sector into the tax net.
The case was filed by citizen Hafiz Muhammad Asghar, who requested the FBR to formulate a clear tax policy on the possession and gains of cryptocurrencies. Asghar argued that he wishes to voluntarily declare and pay taxes on his digital assets, but the absence of a legal framework prevents crypto holders from contributing to the national exchequer.
The FTO’s findings pointed to the fast-growing crypto market in Pakistan. Citing Statista data, the report noted that Pakistan’s cryptocurrency sector is expected to generate $1.6 billion in revenue with over 27 million users by 2025. The FTO acknowledged that the sector has matured significantly and is no longer a fringe activity, yet it continues to operate outside the formal economy due to the government’s inaction.
Despite the gravity of the matter, FBR’s Policy Wing failed to appear at three scheduled hearings. The FTO took notice of this non-compliance and directed the Member (Inland Revenue – Policy) to take disciplinary action against the concerned officers for failing to attend.
The Ombudsman further noted that other regulatory bodies like the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) have already made headway in addressing the risks and opportunities presented by digital currencies. In 2019, SBP clarified that it has not declared cryptocurrencies illegal, while SECP issued a position paper in 2020 outlining potential regulatory approaches.
Calling FBR’s inaction “ineptitude,” the FTO emphasized that the profits generated from crypto transactions will remain undocumented and untaxed unless a proper legal mechanism is introduced. The judgment recommended that FBR take input from stakeholders and formulate a comprehensive taxation policy on digital assets in the upcoming Finance Bill, aligning Pakistan with international best practices.
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