Ukraine is advancing its efforts to regulate the cryptocurrency market, with lawmakers debating tax rates for digital assets, according to a local report.
Officials are considering a lower tax rate of 5-10% on crypto earnings, while others advocate for the standard income tax rate of up to 23%, which includes an 18% income tax and a 5% military levy.
The countryโs push for crypto regulation comes as lawmakers prepare to vote on a long-awaited bill in the coming months. If passed as scheduled, the new regulatory framework could take effect by mid-2025.
Potential Impact of Crypto Taxation on Investors and the Digital Asset Market
Danil Hetmantsev, head of the Verkhovna Radaโs finance, tax, and customs committee, stated that the first reading of the legislation is expected by the end of March, with a potential second reading soon after.
However, one of the key issues surrounding the legislation is taxation, a topic that has sparked debate among officials and investors.
Some policymakers argue that a lower tax rate of 5-10% would encourage compliance and attract investment in Ukraineโs growing crypto sector.
Taras Kozak, a member of Ukraineโs securities regulator advisory group, emphasized that all citizensโ income should be taxed, regardless of the source.
However, concerns have been raised regarding the impact of a 23% tax on undocumented crypto assets, which could impose significant financial burdens on investors who lack proper transaction records.
Crypto Taxation as a Revenue Source Amid Ukraineโs War Efforts
The discussion on crypto taxation is occurring against the backdrop of Ukraineโs ongoing conflict with Russia, which has strained the countryโs financial resources. The government is seeking ways to bolster its budget, particularly for military and national security funding.
While international aid remains a crucial support, Ukraine is exploring internal revenue sources, including potential taxation of cryptocurrency transactions and investments.
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