According to a draft bill to change the Tax Code, Russian citizens will have to notify the tax agency if they own cryptocurrency. Stan Yurchenko, an economist commented on the situation.
“This legislative initiative is not only absurd, since it actually introduces imputation of ownership. It also becomes a serious impediment to the growth of the cryptocurrency market in Russia as a whole,” noted the expert. Stan Yurchenko says that the draft bill in its present form has already set off extremely negative reaction both on the part of the market players and of the expert community. If it is adopted, every citizen of the Russian Federation will be considered an owner of cryptocurrency by default, until they prove otherwise.
“Lack of understanding of the principles of cryptocurrency operations on the part of the authors of the draft bill may lead to immense abuse of the law,” emphasized Stan Yurchenko. He noted particularly that the legislators absolutely fail to take into account a vast number of factors, starting with mining and all the way to the volatility of cryptocurrencies. “In fact, we are dealing with the presumption of guilt of a citizen,” added the expert.
The numbers featured in the draft bill also give rise to grave criticism. In the current version of the bill, the obligation to inform the tax agency arises when the volume of a cryptocurrency transaction reaches 600 thousand rubles and more. Stan Yurchenko noted that this number is ‘a shot in the dark’ and, once again, it does not take into account the specifics of cryptocurrency as a whole, “If we are talking about cryptocurrencies, we always bear in mind its high volatility. In other words, let’s say, something that you bought for ten thousand rubles today, might cost a hundred thousand or nothing at all tomorrow. That is why there is a question: How do you estimate the target volume? Does one estimate it at the time of the transaction? Or at the end of the tax period?” Stan Yurchenko believes that the absence of clear and consistent methodology will unavoidably lead to chaos in tax accounting on the cryptocurrency market.
“If the draft bill is adopted in its present form, it will mean that a large number of players will drop off the radar to other jurisdictions; in other words, instead of the declared legalization of cryptocurrency, we’ll have a quickly-growing black market that is absolutely non-transparent and uncontrollable by the government,” emphasized Stan Yurchenko.