Good day everyone,
I hope you are all well and are had an excellent week, welcome to CryptoGod-1’s blog on all things crypto. I will be discussing the recent news regarding Belarus announcing its intent on delaying any tax on the crypto industry until 2025, and why this might not be as good a deal as it seems.
Belarusian Crypto Plans
A decree was signed by Belarusian President Aleksander Lukashenko this week, according to the media outlet AFN, while stated that crypto miners and other crypto based business will be allowed to operate in the country without having to pay any value-added-tax (VAT), income tax, or personal income tax until at least 2025. This news supersedes a previous iteration that stipulated crypto firms and their staff need not pay tax until the end of 2023, meaning Belarus are looking to become a safe heaven within Europe for those who are looking to work and move into the crypto industry.
This latest development means that any firms involved in the “mining, creation, acquisition, and disposal” of cryptocurrencies for “Belarusian rubles, foreign currency, electronic money and/or through the exchange of other tokens” will be able to do so in Belarus with the comfort of knowing they will have no issues in terms of tax obligations. However, it is also noted that any trading by 'natural persons,' such as individuals who do personal trading, is not considered an act of business, and therefore they will not be required to make any declarations of any transactions.
The Belarusian government first targeted the crypto industry back in 2017, creating a 'special zone' within the capital of Minsk known as High-Tech Park. This area was designed to house crypto mining firms, and in 2018 the government followed that initiative with a range of measures to help draw overseas crypto firms into the country.
Within the new decree the government has instructed the management team at High-Tech Park to develop a concept for the “development of the token sphere – including taxation issues.” President Lukashenko has set a deadline of the 1st of July 2024 for this to be submitted, although there is always the possibility for an extension on this. The country also introduced laws back in 2018 to lure industry employees into the country by waiving visa requirements for those working in the crypto industry.
Belarus Links to Russia and War in Ukraine
The biggest fear and worry many would have in terms of Belarus is its somewhat fractured relationship with the rest of Europe. Belarus is the only country in the Europe to officially be run by a dictatorship. Belarus is a close ally of Russia and is supporting their invasion on Ukraine, even having allowed Russia to "perform weeks-long military drills" on its territory prior to the invasion beginning. Belarus initially denied involvement with the conflict, but has since admitted to allowing Russian missile launchers stationed on its territory to shoot at Ukrainian targets. Since the beginning of the conflict the Belarusian Armed Forces have remained out of the warzone, remaining on Belarusian soil, although there have been fears they may be coerced to assist the Russians. Although Russia's early attempts at getting to the Ukrainian capital Kiev were aided by the shorter route via Belarus, within two months those forces withdrew and land-based military operations originating from Belarus ceased. The general population of Belarus has seemed outraged at their countries involvement in the conflict, and hackers have targeted Belarusian government agencies since the conflict began, along with the country's critical infrastructure in the aim of disrupting the Russian war effort in Belarus.
Many believe it is only a matter of time before Belarus becomes a part of Russia considering their actions regarding this conflict. On the 3rd of July 2022, the national Independence Day of Belarus, Lukashenko announced:
"We are the only country that supports Russia in the special operation'. He added: 'We have a de facto united army"
Giving the presidents comments, it seems likely the nation will become annexed by the Russian Federation, with only the when and how remaining to be resolved. Giving how the displays by the Belarusian government, in their foreign policy, military activities, and sovereignty being dependant on the actions of Moscow, contrasts with the desires of their people seems to be one of the biggest stumbling blocks. However, it seems like the inevitable is bound to happen and Belarus will outright declare its aim of being a member state of Russia.
When taking this into account, it would seem almost disastrous for any crypto based company from the West to consider moving to Belarus for its base of operations. As demonstrated over the past year, Belarus will allow Russia to determine its fate more than the West, and that could create serious impacts on any business who would move there. Of course there is always the possibility of a crypto based venture moving to Belarus and if the unthinkable happens they could quickly up and leave, but that seems somewhat like playing with fire. For now at least, considering the close relationship of the two in the image below, I would be keeping clear of Belarus no matter how attractive the tax heaven seems.
Have a great day.
Peace. CryptoGod-1.
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