Russia’s tax chief said that cryptocurrencies could erode the state’s tax profits and that tax evasion through them should be fought. Russia’s head of Federal Tax Service, Daniil Egorov, expressed concerns in a recent interview with Russian news agency, RBC, on how cryptocurrencies could be a potential means for individuals to evade tax payments.
When asked if he had noticed any “innovative” tax avoidance schemes recently, Egorov was quick to mention cryptocurrencies.
According to him;
“We are watching this market closely and understand that this payment system can significantly erode the tax base.”
Egorov said the issue needs to be addressed in a “systematic” way.
However he did not elaborate on details.
Blockchain for Power of Attorney
Egorov also mentioned that the Federal Tax Service has been using Blockchain technology to store electronic power of attorney letters. Under current law in Russia, cryptocurrencies are recognized as a type of taxable property.
The law detailing how cryptocurrency-related income should be taxed passed a hearing in parliament in February, but has not advanced since. Russia has been quite spotty about its position on cryptocurrencies, starting with the president himself, Vladimir Putin, who has had conflicting views.
No Consistent Crypto Policy
Mr Putin said in October that crypto could be a means of saving for Russians. Prior to the comment, in August this year, Putin ordered a new system that forces Russians to account for their crypto holdings. Also, in March, the president asked local authorities to pay more attention to the illicit use of digital currencies.
Recently, the finance minister compared himself to China and said that his country does not plan to ban cryptocurrencies. However, there does not appear to be a consensus for greater regulation or openness in Russia, given that most Russian politicians and officials have criticized cryptocurrencies.