A study conducted by Ukraine Economic Outlook, in collaboration with crypto exchange Kuna and the Blockchain Association of Ukraine, found that Ukraine’s lack of adequate regulation in the crypto sector resulted in a loss of nearly $49 billion from 2016 to 2022. The report suggests that the country could have generated approximately $10.4 billion in tax revenue from crypto trading if proper regulations had been in place, representing an annual loss ranging from $1.5 billion to $7 billion. The study highlights the potential economic impact of regulatory oversight in the cryptocurrency industry.
The study’s authors acknowledged that the potential tax income was not evenly distributed, with the majority of the “lost” tax revenue occurring during the crypto bull markets of 2017 ($23.3 billion) and 2020 ($14.9 billion). The calculation of losses was based on Ukrainian crypto trading data, domestic mining pool income, and stablecoin transaction information. The authors suggested that taxing crypto miners from 2016 to 2022 could have contributed $7 billion to the Ukrainian Treasury. Ukrainian politicians claim they are taking measures to address the regulatory gap, with Kyiv considering adopting EU MiCA-inspired measures.
Ukraine Poised to Regulate and Tax Crypto?
In response to the study, Ukraine’s Deputy Prime Minister for Innovation, Education, Science, and Technology Mykhailo Fedorov stated on Facebook that it’s “time to bring the crypto sector out of the shadows.” Fedorov emphasized the need to create a special tax system for the crypto market, noting that implementing taxes for the crypto industry would legitimize this new segment of the economy, boost the country’s budget, and increase Ukraine’s attractiveness to investors.
Ukraine’s Deputy Prime Minister Mykhailo Fedorov has expressed the government’s intention to tax crypto-related incomes at 5% for individual citizens and 18% for companies. The country has faced challenges in the past in attempts to tax crypto, with a bill in early 2022 hitting a last-minute hurdle. Despite disruptions caused by the war, Ukraine is now signaling its intention to align with the EU’s approach to crypto regulation. Fedorov emphasized the need for a special tax system for the crypto industry to legitimize it and boost the country’s budget.
