July 14, Paraguay Senate Sent A bill for presidential approval that allows crypto miners to use excess energy and be exempt from value-added tax (VAT). If the bill passes the president, Paraguay could become the next target for crypto mining companies.
Fernando Silva Fasetti, a technology and communications Mr. in Paraguay, celebrated the new bill through his Twitter account.
1) #Cripto # Paraguay After intense debate @SenadoresPyApproved a bill to regulate #cryptoasset Activity. This new law sets out obligations, rights and guarantees to investors, consumers and governments … #Bitcoin pic.twitter.com/ODpQxC3XZy
— FernandoSilvaFacetti (@FSilvaFacetti) July 14, 2022
Bill highlights
The new legislation introduces two important changes to crypto miner taxation and energy usage.
energy
Paraguay makes up 85% of its total energy consumption from the electricity generated by the two dams, Usina and Itaipu. Therefore, the country provides affordable energy. This is a benefit for crypto miners, but the new bill takes the benefits of energy one step further by providing the surplus energy generated by the dam to the crypto miners.
In other words, crypto miners will already receive an additional discount on cheap electricity. According to the new bill, the state-owned energy company ANDE is responsible for determining the available energy and its price and sending it to the designated delivery point.
Facetti explained ANDE’s responsibilities in a tweet Said:
“ANDE defines the technical and commercial conditions of the connection and sets a special electricity rate that must not exceed the industrial rate by 15%.”
Value-added tax
In addition to affordable electricity, the new bill also aims to exempt mining businesses from VAT payments. However, even if the bill is passed, the miner will still be responsible for other domestic taxes.
Minister Fasetti sharp At the National Security Exchange Commission as the body responsible for regulation. If the bill is passed, the Commission is responsible for regulating and overseeing all trading activities, custody, and cryptocurrency emissions. Although not directly disclosed, miners’ tax payments also appear to fall under the Commission’s control area.
Miner trouble
The new bill may provide what the mining community needs recently.
Cryptocurrency miners face real challenges due to current bear market prices. As soon as Bitcoin dropped to the $ 20,000 level in June, mining equipment older than 2019 lost profitability. This has been a pain for individual miners, but corporate miners are also having problems.
Compass Mining and Core Scientific are just two examples of many mining companies that had to sell assets or equipment or close branches to pay invoices.
In addition, some basement-loving countries are changing their minds due to winter conditions. For example, Singapore has decided to deal with cryptocurrency companies of all kinds much less. Meanwhile, Kazakhstan, a mining paradise for the past two years, has driven out miners due to the energy crisis since November 2021.
In conclusion, miners around the world are experiencing serious rough patches. If the President of Paraguay accepts the new bill, crypto miners may get what they want.
