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FTS Russia: cryptocurrencies erode tax base

Mon 22 Nov 2021 ▪ 19h56 ▪ 3 min read — by Susan McCormack

In an RBC interview Daniil Egorov, Head of the Federal Tax Service of the Russian Federation, warned against digital assets.

Egorov against cryptos

Head of the Russian Federal Taxation Service (FTS) Daniil Egorov has stated that cryptocurrencies are eroding the tax base.

The policy-maker has noted that digital assets are often used for conducting illegal operations. Egorov put forward several ideas on how to eliminate the potential threat of crypto-related tax evasion.

One of the questions asked referred to innovative tax evasion schemes. Head of the FTC stressed that the main issue with digital fraudsters is that they act anonymously, yet, since all operations are being conducted in the digital space, scammers can eventually be traced. Another FTC’s concern is that revenues from crypto-related operations are impossible to track, which means the body won’t receive the certain amount of income taxes.

“As regards cryptocurrencies, them being decentralised puts the tax base in jeopardy,” Egorov said.

Seeking solutions

Egorov put forward several ideas on how to eliminate the threat posed by digital assets. One of the ideas voiced was to make parties declare volume, similar to the regulations applied to traditional market.

Egorov has highlighted that rather than acting on a case-by-case basis, it is necessary to apply a systematic approach to regulating crypto to “identify the phenomenon and further follow the guidelines”.

Crypto mining in Russia

Last month Russia saw a sharp increase in crypto miners who came escaping from China after the crypto ban, causing the regions significant electricity problems. Local authorities, including the Governor of the Irkutsk region Igor Kobzev, addressed the government urging to take action.

Russian Minister of Energy Nikolai Shulginov responded and suggested introducing higher electricity taxes for crypto miners.

In the first half of 2021, electricity consumption in Russia reached 4.7 billion kWh against 5.7 billion kWh in the whole 2020. All facts considered, new regulations are likely to be introduced.

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Susan McCormack avatar
Susan McCormack

How many crypto nerds does it take to fork an altcoin? I may be a failed comedian, but crypto is no joke! I want to share my knowledge and help others to see the bright future ahead. #buybitcoin

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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