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In early 2021, the Russian State Duma adopted a bill on crypto taxes, but it has yet to move forwards.
According to FNS head Daniil Egorov, the Russian Federal Taxation Service (FNS) is actively monitoring the cryptocurrency market to prevent tax cheating.
Cryptocurrencies can potentially cause “significant erosion” to Russia’s tax base, Egorov argued in a Monday interview with the local publication RBC.
But cryptocurrency transactions are still traceable and should be reported, the official said, adding that FNS is ready to deploy automated tracking systems to process big data volumes.
“When you get into the digital space, you still leave a trail somewhere. And it’s a matter of time before this trail is identified,” Egorov declared.
FNS is also coming up with strategies to respond to crypto tax evasion techniques, according to the official, as the agency seeks to curtail rather than just identify such behaviour. “Rather than pinpointing acts by a specific player, we’d like to discover remedies that shut down an issue as a phenomenon,” Egorov continued.
In February 2021, the Russian State Duma adopted a law on cryptocurrency taxation in its first reading, forcing people to record cryptocurrency transactions totalling more than $7,800 per year. In mid-October, MPs voted to appoint a responsible committee, the State Duma Committee on Budget and Taxes, in order to move forwards with the second reading.
According to Sergei Khitrov, the founder of the Russian cryptocurrency event Blockchain Life, Russian crypto firms might produce up to $4 billion in tax revenue each year. He claims that the local crypto community has shown a “total failure” to grasp how to pay taxes on cryptocurrency.
The announcement comes as American politicians debate changes to tax reporting laws for cryptocurrency transactions worth more than $10,000 included in a recently enacted infrastructure bill. The law was first passed by the Senate in August, but a group of six senators, including pro-Bitcoin (BTC) Senator Cynthia Lummis, proposed a compromise amendment in September.