Paraguay senators passed crypto taxes and regulations bill


A bill providing taxes and a regulatory
framework for companies involved in the crypto trading services and crypto
mining sectors was approved by the Senators in Paraguay.
One of the provisions is to propose the
launch of the Ministry of Business and Commerce (MIC). This ministry will have
the primary task to regulate service providers of the cryptocurrency industry. As
this bill has passed the Senate, it moves closer to being signed into law by
Paraguayan President Mario Abdo Benitez.
The legislation was proposed by Senator
Fernando Silva Facetti last July and approved by Congress in May before
moving on to the Senate. The bill explicitly relates to crypto mining,
commercialization, intermediation, exchange, transfer, custody, and/or
administration of crypto assets or instruments that enable control over crypto
assets, according to a notice from Paraguayan Congress in May.
Crypto taxation is the major provision of
this bill. According to local news source ABC, businesses involved in the
cryptocurrency sector will be taxed similarly to those who deal with
securities. The Undersecretary of State for Taxation will therefore exempt them
from paying value-added tax (VAT), but they will still be subject to the income
tax system.
The bill also takes into account how crypto miners should deal with regional power providers. The National Power
Administration (ANDE), Paraguay's national electricity administration, need to
know the energy consumption schedule of any prospective mining operations. ANDE
has the right to stop providing electricity to miners if it is discovered that
they are using more than anticipated. Although the plan calls for subsidies for
miners' energy expenditures, they will still have to pay a rate.15% higher than
other industries.
This advances the adoption and regulation
of cryptocurrencies in Paraguay, making it the most recent LATAM country to do
so. In 2021, El Salvador made Bitcoin (BTC) a legal tender, while countries in
Brazil, Argentina, and Panama are all developing their own cryptocurrency laws.
Bill is not supported by all :
Senators pointed out the risks associated
with cryptocurrencies, which prevented the bill from passing unanimously. Senator
Enrique Bacchetta, one of the bill's opponents, allegedly said that while
regulating the cryptocurrency industry might increase profits, he doubted
whether it would ultimately result in more jobs for his fellow people. Senator
Baccetta's worries were supported by Senator Esperanza Martinez, who highlighted
that the energy consumption rate of miners was much higher compared to the number of
employees they would generate.

Indrani bose
CBW - External Analyst
INDIA