Taxes, Higher Electricity Rates Coming for Russian Bitcoin Miners - Lawmaker
The parliamentarian charged with creating Russia’s crypto regulation has hinted that crypto mining tax could be coming – while the days of rock-bottom energy prices for miners across the whole CIS region appear to be coming to an end.
Per Finworld, Anatoly Aksakov, the head of the State Duma’s Financial Market Committee, told attendees at a fintech summit:
“[Russians] are not prohibited from mining, but the regulation of this sector has not yet been clearly carried out. The issue of the taxation of this sector must be properly spelled out in legislation.”
Across the border in Belarus, miners already pay higher rates than individuals, although the government has taken a pro-mining and crypto stance. Lawmakers elsewhere in the region may well look to Minsk for pointers on how to impose special rates for crypto miners.
Some industry figures have welcomed the move, but suggested other “stumbling blocks” could be ahead. Dmitry Machikhin, the CEO of the crypto accounting service Bitnalog, told Cryptonews.com:
“I believe Aksakov is right – though the time has come earlier than he predicted. The draft law of crypto taxes is still in the Duma, after passing its first hearing. Anyway, the issue of crypto taxes is Russia is another stumbling block as far as crypto regulation and adoption is concerned. It will require a lot of effort from the authorities.”
Aksakov also stated that there was “serious work” to be done on crypto-related legislation, which has thus far failed to emerge in any meaningful form – due mainly to a political impasse. The government has found itself in the middle of a tug-of-war between pro-business interests and the vehemently anti-crypto Central Bank.
Aksakov said that the Central Bank was looking at crypto and blockchain-related “proposals” from three of the country’s biggest companies: the metals firm Norilsk Nickel, the rail giant Transmashholding and the banking and tech giant Sberbank.
The lawmaker may have been speaking along the same lines as Vasily Shpak, the Deputy Minister for Industry and Trade, who, per Kommersant, has asked the Ministry of Digitalization and the Central Bank for feedback on crypto-related proposals from oil firms.
The companies reportedly want to allow crypto miners to work on oil pumping stations, using surplus flare gas to power their rigs.
Meanwhile, yesterday, Cryptonews.com reported that Kazakhstan is now on the verge of introducing a new, higher tax rate for miners after “emergency shutdowns” were reported at three of the nation’s power plants. A sharp rise in crypto mining, some think, is already putting a strain on power networks.
And provincial chiefs in Russia have also written to Moscow to complain they are also struggling to cope with increased power consumption, with the finger of blame once again aimed at miners. The central government’s energy decision-makers responded by claiming miners could soon be forced to pay higher rates for their electricity.
Although the police can prosecute miners for illegally using electricity resources intended for industrial use or stealing power from the grid, officers are powerless to go any further than this due to the fact that mining and cryptoassets have no clear legal definition in Russian law.
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