A key international crypto company has suggested the federal government imposition of tax on crypto assets and formulate regulations in this regard.
The director of the first licenced crypto-asset company “RAIN” Aatiqa Lateef in a media briefing said that no country or individual can remain away from the upcoming digital trends and developments.
Briefing on the importance of crypto assets in any modern economy, she said that relevant officials from 44 developing and underdeveloped countries are meeting in El Salvador over crypto asset regulations.
“Cryptocurrency or crypto asset as it called differently in various jurisdictions, have been largely adopted by advanced economies,” Lateef said.
“But the El Salvador meeting is to discuss the best regulatory framework for less advanced economies,” she added.
GM Pakistan RAIN Zeeshan Ahmed said that there was a potential of around $90 million if capital gain tax is imposed on crypto assets.
“The West has acknowledged that crypto-assets continue to be traded in the grey areas, likewise it is being traded-in Pakistan,” Ahmed said.
“We suggest that as Europe has done so, Gulf countries have recognised it Pakistan too should tax and regulate crypto assets, ” he added.
The media was informed that while major businesses including Starbucks and Emirate airlines have started to receive payments in Cryptocurrencies, India has imposed a 30 percent tax on profit over it.
“This was the crypto exchanges have started to get registered with tax collection body in India,” Ahmed said, and the formulation of laws continues.
RAIN officials said local challenges are primarily around building capacity and understanding crypto assets. Pakistan ranks in the third slot globally in crypto subscription and usage was growing rapidly.
In their meeting with the officials of the Finance Ministry, the RAIN executives have said the biggest challenge is the initial capacity building needed for regulators. It was because Crypto is a very new arena and without the requisite due diligence and technical guidance.
The ministry was informed that Pakistanis were vulnerable to fraud while trading crypto assets through irregular means.
There are over 8000 Cryptocurrencies being traded over the dark web – a majority of these are fraudulent and do not provide any protection to investors, therefore recognition of this activity was needed.
They suggested that to counter this challenge ‘RAIN’ will share its experience as the first licence holder to operate a crypto brokerage and a crypto exchange in the Gulf region. They operate over 80 cryptocurrencies and fulfil all regulatory requirements.
Meanwhile, the Sindh High Court has directed the Ministry of Law and the Finance Ministry to finalise the matter.
Earlier the SECP and the State Bank have decided to disown cryptocurrency or crypto assets on the ground that it could invite the ire of the IMF and the FATF.
Surely there is a need to add the digital currencies into the tax base.
Thank you very much for sharing such a useful article.
It is worth noting that different countries have taken different approaches to taxing cryptocurrencies.
Some have opted to treat them like traditional assets and tax them accordingly, while others have implemented more unique approaches.