Russia’s tax chief says cryptocurrency could erode the tax base

The head of FNS Daniil Egorov said that the Russian Federal Tax Service (FNS) is actively monitoring the cryptocurrency market to prevent tax evasion.

Cryptocurrencies Could Cause ‘Great Erosion’ To Russia’s Tax Base, Egorov argue In an interview on Monday with local publication RBC.

But the official said that cryptocurrency transactions are still traceable and must be reported, adding that FNS is ready to deploy automated tracking systems to handle massive data volumes.

“When you get into the digital space, you still leave a trail somewhere. It’s only a matter of time before that path is set,” Egorov declared.

The official also noted that the FNS is now devising ways to respond to crypto tax evasion practices as the authority looks to curb such activity rather than just limit it. “We would like to find solutions that close a problem as a phenomenon rather than just specifying actions by a specific player,” added Egorov.

Russian State Duma Approved Bill on Cryptocurrency Taxes On first reading in February 2021, residents are asked to report crypto transactions in the total amount Exceeding $7,800 a year. In order to proceed with the second reading, lawmakers Established To appoint a responsible committee, the State Duma Committee on Budget and Taxes, in mid-October.

According to Sergei Khitrov, founder of the Russian crypto event Blockchain Life, the Russian crypto business Could generate up to $4 billion The amount of taxes per year. According to him, the local crypto community has so far shown a “complete failure” of understanding how to pay taxes on cryptocurrencies.

Related: House passes 1TB infrastructure bill with crypto tax for Biden approval

The news comes in the form of US lawmakers resist changes For tax reporting rules for crypto transactions over $10,000 in the newly passed infrastructure bill. The bill was initially approved by the Senate in August, which was with a compromise proposal Amendment by a group of six senators, including a pro-Bitcoin (BTCSenator Cynthia Loomis