Recently, the president of Russia, Vladimir Putin, has cleared that they are not planning to ban cryptocurrencies in the country. This means that they might soon regulate cryptocurrencies and have proper taxation rules and other laws in place. Considering that Russians hold over $200 billion in cryptocurrencies, it is no surprise that estimates suggest Russian authorities might collect $13 billion in taxes every year. It seems that the government is considering different ways to assess and tax crypto in the market.
Russian authorities might collect $13 billion in taxes
As I said above, Russians hold nearly $200 billion in cryptocurrencies which is roughly equal to 12% of the entire market cap of crypto. Therefore, it is clear why the authorities haven’t banned crypto after all. First of all, the impact of this on the citizens would have been huge; it would have been a disaster for their economy and the entire crypto space. Secondly, with such a huge market, the option to tax investors would be a great source of revenue for the government.
Reports suggest that the taxation would happen in two ways. The first is for the crypto exchanges and other businesses on crypto, and the second is for the investors who are profiting from their investments. The tax rates haven’t been decided yet but based on the estimates the tax from businesses is expected to be around $1.2B -$2.4B and around $8B-$10B from investors.
Taxing the crypto mining businesses
Crypto mining is also a pretty big sector in Russia, and they will also be fairly taxed like other businesses. The State Duma Industry Committee head has proposed a 15% tax on them. His argument is that if we consider crypto to become securities in a way after mining, then the tax shouldn’t be less than 15%. The mining industry in Russia is the 3rd largest now, so they will be able to generate quite some revenue from this source as well. However, the good thing is that the rates they are proposing are more or less at par with traditional markets, unlike India.
What are your thoughts as reports suggest that Russian authorities might collect $13 billion in taxes? And do you think that the tax rates will be 15% or lower? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: Indian Finance Minister says government is constantly monitoring crypto.
