Ukrainian Lawmakers Mull Two Crypto Tax Bills

Source: Mariana Ianovska/Adobe

Ukrainian lawmakers are set to debate two crypto tax bills, as Kyiv looks to raise money from crypto traders.

Per Minfin and PSM7, Yuriy Boyko, a member of the National Commission on Securities and the Stock Market, confirmed that the regulator was the author of one of the bills.

Boyko said he assumed that “specialists from the Ministry of Finance and the State Tax Service worked on” the second bill.

This bill’s author is MP Anton Shvachko, and the text was drafted, at least in part, by the Ministry of Digital Transformation.

Mykhailo Fedorov, Ukraine’s Deputy Prime Minister and Minister of Digital Transformation, said:

“We expect parliament to support this draft law and help develop new digital industries. Business support will be the foundation of Ukraine’s economic growth.”

Mykhailo Fedorov, Ukraine’s Deputy Prime Minister and Minister of Digital Transformation, speaking at an event earlier this year. (Source: The Lisbon Council/YouTube)

Meanwhile, the regulator, which is yet to reveal the full details of its own proposal, said that it had worked with EY (Ernst & Young) and the USAID Financial Sector Reform Project on the draft.

The bills are now in the consultation stage. Boyko noted that “almost 200 comments” had been made on the commission’s draft law.

He added that 33 of these comments had been “taken into account” in a revised version of the bill.

Boyko claimed that the commission’s bill had been “verified for compliance with European law.”

He added that the bill was “consistent with the recommendations of the European Union.”

Boyko said that this had been done “as part of Ukraine’s application for EU membership.”

But Alexey Zhmerenetsky, a Ukrainian MP and the Chairman of the NGO Blockchain4Ukraine, said the two bills “differ greatly.”

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Zhmerenetsky said the bills included “different tax rates, as well as different scales of implementation of [the EU’s] MiCA regulations.”

MiCA (Markets in Crypto-Assets) is a set of rules governing cryptoassets, exchanges, brokers, and stablecoin issuers.

MiCA was signed into EU law last year, marking the first time a political bloc has streamlined crypto regulation.

Alexey Zhmerenetsky, a Ukrainian MP and the Chairman of the Blockchain4Ukraine NGO, speaking in 2020. (Source: Distributed Lab/YouTube)

Ukrainian government officials and the nation’s central bank have stated they want to use MiCA as a model for their own crypto regulations.

Zhmerenetsky suggested that the bills would take time to consolidate. And he urged ministries to temper their regulatory zeal, saying:

“Ukraine is not yet a member of the EU. And the regulations detailed in MiCA are more complex. In the current conditions, […] Ukraine does not have a large crypto market […]. As such, the implementation of strict regulations will make our country less competitive.”

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The MP suggested that politicians would need to “reach a compromise” between the two proposals.

Zhmerenetsky added that MPs would also need to “take into account the wishes of the FATF [Fiancial Action Task Force] and the European Commission.”

The MP stated that the process would not be complete before 2024 at the earliest, explaining:

“In an optimistic timeline, a [consolidated bill] will be ready by the end of spring [2024]. And, after that, it will be possible to [pass the bill into law] in a month or six weeks.”