Mr. Zeeshan Ahmed, Country General Manager for Rain Financial Inc., revealed that simply legalising crypto trading in Pakistan could generate at least $100 million in taxes — or Rs. 20 billion — in one year.
Mr. Ahmed was referring to a Chainalysis report that claims Pakistan-based crypto traders made $650 million in profits from July 2020 to June 2021, and that if taxed at only 15% (India taxes crypto profits at 30%), the government could generate more than $100 million or Rs. 20 billion in taxes.
If you’re wondering how much this is, consider that Pakistan’s entire salaried class paid around Rs. 151 billion in taxes in 2020-21.
Not to mention the $650 million in profits made by Pakistani crypto traders, or Rs. 20 billion in potential taxes per year, is a very conservative estimate given that trading is not permitted in Pakistan and the FIA has recently been on the hunt for crypto traders.
If allowed and legalized, profits (and, eventually, taxes) could be several times what has been proposed above.
Rain Financial Inc, which has crypto exchange licenses in Bahrain and Turkey, is looking to enter the Pakistani market as well, but unlike other exchanges, it plans to enter the country only after crypto trading is legalized in Pakistan.
The Rain team reportedly met with several stakeholders, including the State Bank of Pakistan, SECP, Ministry of Finance, FBR, MoITT, and other bodies, and according to Ms. Aatiqa Lateef, Rain Financial’s Director of Public Policy (Pakistan), the meetings were fruitful, and she expects positive things to happen regarding the legalization of crypto trading in the country.
In case you are unaware, cryptocurrency trading is prohibited in Pakistan. This means you can’t trade crypto assets on an exchange or even privately with another person in the country.
While it is illegal, Pakistanis have been regularly trading crypto on exchanges such as Binance (another crypto exchange), which is illegal in nature and if found operating, the FIA could imprison the traders for the offense.
The FIA has actually registered thousands of FIRs against individuals and has reportedly arrested a few traders in the recent past.
Rain Financial is leading the charge to change that. It intends to persuade the country’s regulators to legalize crypto trading before entering the Pakistani market and offering its services there.
To read our blog on “Govt. of Pakistan has no plans to legalize Cryptocurrency, Fawad Chaudhry,” click here.