Cryptocurrencies Outside FBR’s Tax Net: FTO
In a recent statement, the Federal Tax Ombudsman (FTO) revealed that cryptocurrencies remain outside the Federal Board of Revenue (FBR)’s tax net in Pakistan. This shocking revelation raises questions about digital asset regulation, tax policies, and the country’s financial monitoring capabilities.

In a recent statement, the Federal Tax Ombudsman (FTO) revealed that cryptocurrencies remain outside the Federal Board of Revenue (FBR)’s tax net in Pakistan. This shocking revelation raises questions about digital asset regulation, tax policies, and the country’s financial monitoring capabilities.
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The FTO report highlighted serious regulatory gaps in how Pakistan tracks and taxes digital assets like Bitcoin, Ethereum, and other cryptocurrencies.
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The statement was part of an investigation into the State Bank of Pakistan’s (SBP) and FBR’s role in controlling crypto-related activities.
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According to the FTO, despite massive crypto trading volumes, the FBR has no proper mechanism to identify, regulate, or tax cryptocurrency investors.
This isn’t just another financial headline — this has huge implications for:
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Tax collection and revenue generation
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illegal fund transfers and money laundering
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Investor protection and regulation
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International compliance standards
The absence of crypto taxation creates a loophole for traders to earn and transfer millions without ever appearing on the tax radar.
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The FTO's report estimated that billions of rupees worth of crypto trading takes place annually in Pakistan.
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This includes platforms like:
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Binance
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LocalBitcoins
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P2P networks
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Private wallets
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The lack of oversight means that huge amounts of digital currency are moving without tax declarations or identity checks.
"The government is missing out on massive revenue by not taxing crypto activities," the FTO stated in its official remarks.
The FBR (Federal Board of Revenue) is Pakistan’s primary tax authority. Its job is to:
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Monitor all sources of income in the country
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Identify tax evaders
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Collect income tax, sales tax, and customs duties
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Implement digital tax reforms
However, in the case of crypto, FBR is virtually blindfolded:
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No direct system to track wallets or exchanges
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No reporting requirements from users or platforms
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No integration with global crypto compliance networks
The FTO raised concerns that unregulated crypto activity could be used for:
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Money laundering
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Terror financing
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Illegal cross-border transactions
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Hawala/hundi-style operations
This risk becomes even greater as crypto transactions are anonymous, decentralized, and hard to trace without technical resources.
Create Crypto Tax Framework:
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Define how crypto assets are taxed (capital gains, business income, etc.)
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Make registration of wallets mandatory
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Track trading activity
Train FBR Officers in Digital Forensics:
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Officers need to learn how to trace wallets and blockchain transactions
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Use analytics tools to monitor suspicious trades
Integrate with Global Crypto Platforms:
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Collaborate with international exchanges to get user data
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Introduce reporting obligations like Form 8949 in the US
Establish a Regulatory Body for Crypto:
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A separate body or department under SECP or SBP could be formed
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Create rules for licensing exchanges and crypto businesses
The FTO’s revelation is a wake-up call for policymakers. As crypto grows rapidly in Pakistan, staying unregulated and untaxed isn’t a long-term option.
It’s time for the government to:
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Recognize crypto as a digital asset
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Regulate it responsibly
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Tax it fairly
This would not only bring transparency and safety to investors but also help boost national revenue in a digital economy.