Pakistan could generate at least $100 million in taxes in one year — or Rs. 20 billion — by just legalizing the crypto trading in Pakistan, revealed Mr. Zeeshan Ahmed, Country General Manager for Rain Financial Inc.
Mr. Ahmed was referring to a Chainalysis report which claims that Pakistan based crypto traders made $650 million in profits during July 2020 to June 2021, and if taxed at just 15% (for reference India taxes crypto profits at 30%), the government could generate more than $100 million or Rs. 20 billion in taxes.
Just in case you are wondering how big this amount is then for reference, Pakistan’s entire salaried class paid around Rs. 151 billion in taxes during 2020-21.
Not to mention, the number $650 million in profits by Pakistani crypto traders or Rs. 20 billion in potential taxes per year is very conservative estimate considering that trading is not allowed in Pakistan and that FIA has been on the run to catch crypto traders lately.
If allowed and legalized, the profits (and ultimately) the taxes could be several times of what’s proposed above.
Rain Financial Inc, which has a crypto exchange license in Bahrain and Turkey, is looking to enter Pakistani market as well, but unlike other exchanges, it only plans to step into the country after legalization of crypto trading in Pakistan.
For the purpose, the Rain team has reportedly met with several stake holders, including State Bank, SECP, Ministry of Finance, FBR, MoITT and other bodies and as per Ms. Aatiqa Lateef, the Director of Public Policy (Pakistan) for Rain Financial, the meetings were fruitful and she’s expecting positive things happening around the legalization of crypto trading in the country.
Just in case if you aren’t familiar, crypto trading is banned in Pakistan. This essentially means that you can’t trade crypto assets either on an exchange or even privately with another person in the country.
While banned, Pakistanis have been regularly trading crypto on exchanges like Binance (another crypto exchange), which is illegal in nature and if found operating, FIA could put the traders behind the bars for the offense.
FIA actually registered thousands of FIRs against individuals and has reportedly arrested few of the traders in recent past as well.
Rain Financial is spearheading the efforts to change that. It wants to convince the regulators in the country to regularize crypto trading and then to enter Pakistani market to offer its services here in the country.