Pakistan ranks third globally in crypto

ISLAMABAD:

Pakistan has emerged as the world's third-largest cryptocurrency market, with around 40 million Pakistanis holding crypto accounts.

Pakistan Virtual Assets Regulatory Authority (Pvara) Chairman Bilal Bin Saqib on Monday told the Senate Standing Committee on Cabinet Secretariat that Pakistani youth had developed an understanding of digital currencies and were seeking greater economic independence.

The committee, chaired by Senator Rana Mahmood-ul-Hassan, discussed the growing trend of digital currencies as well as the pricing and taxation of imported mobile phones.

Highlighting a significant gap between the number of crypto users and registered taxpayers in the country, Bilal said Pakistan had around 40 million crypto accounts, while the total number of active taxpayers stood at approximately six million.

Talking with reference to Pvara, he said the authority had been established to bring digital currency users into the tax net and regulate the rapidly expanding virtual assets sector.

He said the authority was recruiting permanent staff and had so far utilised only eight per cent of the budget allocated to it by the government. "Pakistan aims to become a global leader in Islamic finance through digital assets and plans to bring remittances from abroad onto digital platforms," he said.

The PVARA chairman said the concept of money was changing globally, with governments in the UAE, Thailand and Singapore moving towards alternative forms of currency, while Hong Kong had issued bonds on blockchain technology.

He said Pakistan had established a regulatory regime for cryptocurrencies, arguing that banning technology would amount to restricting the country itself.

According to Bilal, several international companies had applied for no-objection certificates (NOCs) to operate in Pakistan's digital currency sector. He warned that after September 5, the authority would take strict action against illegal digital asset companies.

On mobile phone taxation, Pakistan Telecommunication Authority (PTA) officials told the committee that the Customs authorities would have to develop a proper mechanism for determining the prices of imported mobile phones.

The committee directed customs officials to devise an effective mechanism concerning taxes on imported handsets and immediately recommended a reduction in taxes on imported mobile phones.

Senator Abdul Qadir said consideration should also be given to whether taxes should be imposed on mobile phones at all. Federal Board of Revenue (FBR) officials told the committee that the authority to impose or abolish taxes rested with Parliament.

The committee subsequently sought reports from the FBR and the Tariff Commission on taxation of mobile phones. PTA officials said 35 companies were currently manufacturing smartphones in Pakistan.

Senator Saadia Abbasi called for facilitating businesses instead of exploiting consumers, saying the government was creating difficulties for people by imposing levies and taxes.

Senator Dilawar Khan said Pakistan's policies lacked a long-term perspective.

Cabinet Secretary Kamran Ali Afzal said digital payments were bringing about a revolution in the country's payment system. However, he opposed the imposition of sales tax on mobile phones.

The standing committee sought another briefing from Pvara on the digital assets sector.