Senators in Paraguay passed a bill on taxes and regulations in the cryptocurrency sector. The bill targets firms offering crypto trading services and those operating in the crypto mining sector.
Paraguay set to establish crypto regulations
The crypto framework in Paraguay has been under consideration by lawmakers over the past year. The lawmakers are focusing on establishing a framework that includes businesses and protections for traders.
The recently passed bill was tabled last year by Senator Fernando Silva Facetti. Before coming to the Senate, Congress had approved this bill in May. The bill is comprehensive and focuses on many areas in the crypto sector.
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One of the provisions is the launch of the Ministry of Industry and Commerce (MIC). This ministry will have the primary task of regulating businesses offering crypto services. The passing of this bill in the Senate brings it closer to being signed into law by the President of Paraguay, Mario Abdo Benitez.
In May, the Paraguayan Congress issued a notice that the bill targets cryptocurrency mining, exchange, transfer, custody, and a wide range of services associated with cryptocurrencies.
The other major provision of this bill is crypto taxation. According to a report by ABC, companies offering crypto-related services will be under the same taxation laws as those offering securities. These companies are exempted from paying the Value Added Tax but must comply with the income tax regime.
The bill also addresses crypto mining activities. It discusses how a cryptocurrency miner should interact with local power suppliers. Crypto miners must report their energy consumption details to the National Electricity Administration (ANDE).
Miners that consume more electricity than initially planned risk having their electricity supply terminated. Moreover, the bill says that energy costs for miners will be subsidized, but in essence, they will be paying a rate that is 15% higher compared to the other industries.
Not all support the bill
The bill was not passed unanimously, as senators pointed out the risks within the cryptocurrency sector. Senator Enrique Bachetta said that regulating the crypto industry would generate more profits for businesses operating in the space. However, the jobs created by the industry were few.
Senator Esperanza Martinez also supported the concerns raised by Bachetta. Martinez said that the high energy consumed by crypto miners did not equal the number of jobs created by the sector.
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