Reuters reported that Russia policymakers signed a measure to exclude token issuance from paying value-added taxes (VAT) only days after the country’s officials submitted a plan to oversee the illicit issue of crypto if authorized.
Members of Russia’s Federal Assembly, the State Duma, passed the draft legislation in its second and third readings earlier this week. The chamber has 450 members who are in charge of establishing national policy.
Instead of penalizing people and businesses for illicit cryptocurrency issuance, the newly developed plan proposes to enable digital asset issuers to produce and launch tokens free of VAT.
An investigation by other agencies is required before any of the written legislation can be implemented, according to a report in the media.
The Federation Council, often known as the upper house, which represents the interests of the nation’s regions, would then vote on the measure. Russia President, Vladimir Putin, will have to sign it before it can take effect.
Digital asset issuers will be free from paying VAT under the proposed legislation as well as new tax rates on earnings produced from the selling of cryptocurrencies.
The current exchange rate for crypto and traditional assets is both 20%. Russian businesses would be subject to a 13 percent tax, while international businesses would be subject to a 15 percent tax under the proposed legislation.
A legislative framework for the usage of cryptocurrencies in Russia is being developed by Russian financial authorities and legislators.
The Bank of Russia has previously advocated a complete ban on Bitcoin mining and crypto activity. Financial authorities in China, on the other hand, feel that regulating crypto assets instead of outright banning them is the better option.
President Putin pushed both committees to come to an agreement on the legal status of digital assets as the debate raged on. Cryptocurrencies are currently being defined as legal tender by both the U.S. Congress and the state legislatures.