If Russia regulates the market, Moscow could pocket $13 billion in crypto tax each year

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While Moscow con­tin­ues weigh­ing its options for reg­u­lat­ing cryp­tocur­ren­cies, pre­lim­i­nary esti­mates sug­gest that Russ­ian author­i­ties could col­lect up to $13 bil­lion (1 tril­lion rubles) from tax­ing the mar­ket, accord­ing to The Bell.

The local Russ­ian pub­li­ca­tion ref­er­enced the note pre­pared by the government’s ana­lyt­i­cal cen­ter, which pro­vid­ed dif­fer­ent options for assess­ing and tax­ing the cryp­to mar­ket in the country.

12% of global crypto holdings

The authors of the note esti­mat­ed Russia’s share in the glob­al cryp­to mar­ket to rough­ly 12%.

With last year’s aver­age cap­i­tal­iza­tion of the glob­al cryp­tocur­ren­cy mar­ket at $1.87 tril­lion, Russia’s share would account for rough­ly $214 billion.

The same note esti­mat­ed that even a sim­pli­fied tax­a­tion sys­tem could gen­er­ate up to one tril­lion rubles a year, which rough­ly equates to $13 billion.

Accord­ing to the experts of the ana­lyt­i­cal cen­ter, the tax­a­tion could be imple­ment­ed on two levels–one for legal enti­ties, such as cryp­to exchanges and inter­me­di­aries, and anoth­er for income from invest­ing in cryptocurrencies.

Their esti­mates sug­gest­ed that, depend­ing on the tax rate, the state could col­lect any­where between 90 and 180 bil­lion rubles (between 1.2 and 2.4 bil­lion US dol­lars) a year from legal cryp­to-exchanges and pock­et addi­tion­al 606 bil­lion rubles (8 bil­lion US dol­lars) by tax­ing the income from invest­ing in cryptocurrencies.

What about mining?

Mean­while, the head of the State Duma Indus­try Com­mit­tee Vladimir Gutenev pro­posed a min­i­mum of 15% income tax for cryp­to miners.

“If we equate cryp­tocur­ren­cies with secu­ri­ties, if there are cer­tain gate­ways between those who mine, and when this mined cryp­tocur­ren­cy becomes a secu­ri­ty for which income tax must be paid. Prob­a­bly, it should not be less than 15% income tax. Min­ing itself can­not be less than 6% tax, as it hap­pens in sim­pli­fied terms,” argued the lead­ing Russ­ian lawmaker.

Rus­sia ranks as the third biggest cen­ter for min­ing Bit­coin, fol­low­ing the US and Kaza­khstan, accord­ing to data from the Cam­bridge Cen­tre for alter­na­tive finance.

In the after­math of China’s ban on min­ing, Rus­sia sur­faced as one of the top migra­tion des­ti­na­tions, see­ing its hashrate share rise from 6.8% to 11.2%.

Russia’s cen­tral bank recent­ly pro­posed a blan­ket ban on cryptocurrencies–wanting to pro­hib­it their issuance, cir­cu­la­tion, exchange, and trade in the country.

How­ev­er, oth­er parts of the gov­ern­ment, includ­ing the Finance Min­istry, opposed strict bans and argued for a com­pre­hen­sive reg­u­la­to­ry frame­work that would allow Russ­ian author­i­ties to have a more robust con­trol over transactions.

 

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