Ukraine is working to legalize cryptocurrency to fill its coffers.

The legalization of cryptocurrency can become a practical alternative when looking for new sources of tax revenue, according to Deputy Minister of Digital Transformation Oleksandr Bornyakov. At the same time, he noted that it is important to introduce taxation with a new class of assets that are designed to develop the crypto industry. According to Bornyakov, a new draft law provides the following:

• preferential taxation of income from crypto transactions for individuals for eight years: 5% in the first three years, 9% in the next five years, and 18% after eight years
• income tax for crypto providers will remain at 18% or 9% tax on withdrawn capital, subject to the special Diya.City regime

According to the deputy minister, this approach will stimulate the crypto market’s development and contribute to the formation of a tax-paying culture among its users. Earlier, Bornyakov said that from 2016 to 2022 Ukraine suffered significant economic losses due to the lack of regulation in the crypto sphere; the country lost $48.8B in personal and corporate income and $4B in tax revenue.