Sunday, December 5

Russia prepares law to tax Bitcoin mining

In Russia, the State Duma decided to create a parliamentary working group that will discuss formulas to regulate the Bitcoin mining industry in the country. The issue was addressed in the plenary of the parliament this Thursday, as reported on its official website.

The proponent was the First Vice President of the Security and Anti-Corruption Commission, Andrey Lugovoi. The parliamentarian he pointed that the lack of regulation leads the authorities to “a dead end” when it comes to applying existing laws to this sector.

Russian MP Andrey Lugovoi believes that a legal framework must exist for bitcoin miners to pay taxes. Source: Wikipedia.

According to Lugovoi, «the miners are enriched annually by USD 2 billion at the expense of the population and do not pay taxes. This implies that the proposal aims to establish fiscal mechanisms that allow the State to keep a part of the profits from this activity in Russian territory.

The parliamentarian also pointed out that his Commission already has a draft law drafted that will be presented as soon as possible. He also proposed creating the inter-parliamentary group to discuss the issue. The request was heard by the president of the State Duma, who ordered the formation of the group, with Lugovoi as deputy and proponent.

It should be noted that, although the mining of Bitcoin and other cryptocurrencies does not yet have a legal framework in Russia, the activity has been growing at significant levels in that country. Currently, it is in the third place in terms of hash rate concentration with 13%, according to data published by the Cambridge Center for the Financial Alternative.

The increase in mining in Russia is a consequence of the migration of miners from China, a country that used to concentrate up to 70% of the Bitcoin hash rate before it decided to ban cryptocurrency mining in its territory, almost 2 months ago.

Russia keeps trying to regulate Bitcoin mining

It is not the first time that Russia has tried to establish some kind of regulations or specific conditions for the cryptocurrency mining sector. Last October the Russian Energy Minister said that Bitcoin mining could be subject to special electricity rates. The official assured that miners “would make the situation worse” if they were allowed to take advantage of reduced rates for the residential sector.

A year ago, news also circulated that bitcoin mining could be regulated in Russia. At that time, the proposal came from the Ministry of Finance, which proposed to reform the law to prohibit miners from receiving incentives for their activity.

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