The Economic Security Bureau deputy director claims that without proper regulation, the country is losing tens of millions in taxes every month.
Ukraine has reportedly missed out on more than $81 million in tax revenue due to unregulated cryptocurrency exchanges in the country over the past decade.
The news was unveiled in the newest Economic Security Bureau of Ukraine report, leading to growing concerns and debates within the nation's crypto community and regulatory bodies.
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The Economic Security Bureau's analysis indicated that unregulated crypto exchanges had contributed to tax losses amounting to 3 billion hryvnia, approximately $81 million, from 2013 to 2023.
A deep dive into the trading activities conducted by Ukrainian residents revealed roughly $55 billion in trading volume in Bitcoin (BTC), Ether (ETH), and Tether (USDT) over the same period. This significant volume, devoid of regulation, underscores the magnitude of the missed opportunity for the Ukrainian government.
The complexity of the matter was evident in the statements made by the deputy director of the Economic Security Bureau, Andriy Pashchuk.
There are different points of view on how these transactions should be taxed, and <the bureau> will act in accordance with the provisions adopted by the deputies.
However, Pashchuk emphasized the ongoing loss as the issue continues to be debated, with tens of millions in taxes being lost every month.
In March 2022, President Volodymyr Zelensky signing of the legislation "On Virtual Assets." The bill aimed to establish a regulatory framework for cryptocurrencies within Ukraine. However, despite these efforts, no amendments have been made to the country's tax and civil codes to accommodate this legal framework. The slowed legislation has led to questions and criticisms from crypto users.
Many crypto investors in Ukraine questioned the possibility of being required to deliver "backpay" of taxes for transactions conducted over the last decade. A Telegram user named Vini2010w expressed frustration with the government's inaction, stating:
If they had adopted the law <...> everything would have been settled a long time ago. They themselves boycotted, and now they consider it a lost profit. Idiots.
The business community's perspective adds another layer to the complex issue. Michael Chobanian, founder of Ukraine-based crypto exchange Kuna, claimed that it was “impossible” to tax crypto transactions before the framework was officially implemented. Chobanian further argued that the bureau's figures were “taken from the air” and criticized its analytics for not understanding the crypto landscape.
The Ukrainian government's report on the tax shortfall serves as a testament to the complex relationship between governmental regulation and the ever-evolving world of cryptocurrency. It is a clear reminder that as the digital financial landscape grows and changes, governments must act decisively and collaboratively to keep pace with the ever-evolving digital space.
In other Ukraine-related news, new figures reveal that Ukraine received $225 million in cryptocurrency donations since the onset of the full-fledged Russian invasion.
