Russia Considers Electricity Use Tax For Crypto Miners

Russia considers electricity use tax for crypto miners (Photo; Doc. Wibestbroker)

JAKARTA - Russia's Ministry of Finance is considering implementing a new tax focused on using electrical energy by crypto miners. The move is taken as a temporary solution while the government is looking for the best way to impose a more accurate tax on miners' income. The decision comes amid growing concerns about the environmental and economic impacts of energy-intensive crypto mining activities.

According to a report from the TASS news agency, Deputy Finance Minister Ivan Chebeskov revealed on September 18 that his ministry was considering launching a special excise tax on electricity used by crypto miners. This move is part of the government's efforts to regulate the crypto mining industry that has obtained legal status in Russia.

Although the government's long-term target remains to collect taxes on miners' profits, Chebeskov stated that taxes based on electricity consumption can be a temporary solution. This is because of the difficulty in calculating the benefits of miners who often use various undisclosed crypto wallets. Measuring electricity consumption is considered easier and more accurate than assessing the profits made from mined crypto assets.

Quoted from Crypto News, Chebeskov said, "Excise tax on electricity use may be a temporary solution before we reach a more comprehensive profit-based tax system."

Russia, which is now one of the countries with the most crypto miners in the world, faces challenges in determining the right way to calculate the benefits of mining activities. Miners often use creative accounting strategies that make it difficult for governments to assess real income. In addition, the problem of calculating crypto asset exchange rates is also an obstacle in the application of profit-based taxes.

Meanwhile, even though the crypto mining industry is legal in Russia, crypto exchanges do not yet have a clear legal status, making it difficult to audit. Several policymakers have suggested that the government build a state-run crypto trading platform, but there are no concrete plans from major Russian stock exchanges, such as the Moscow Exchange and Saint Petersburg Currency Exchange, to start trading crypto assets.