The Ukrainian government was able to update its tax legislation thanks to a crypto bill that was passed and signed into law in 2022, but local exchanges continue to mostly operate outside of this framework.
According to information provided by the Ukrainian government, approximately $81 million has apparently been withheld from the national budget over the past ten years by bitcoin exchanges operating in Ukraine. According to the Economic Security Bureau of Ukraine, tax revenue lost to unrelated cryptocurrency exchanges between 2013 and 2023 totaled almost 3 billion hryvnia.
![Unregulated Crypto Exchanges Cost Ukrainian Government $81M in Taxes image 9](https://i0.wp.com/nosisnews.com/wp-content/uploads/2023/08/image-9.png?resize=1024%2C452&ssl=1)
![Unregulated Crypto Exchanges Cost Ukrainian Government $81M in Taxes image 9](https://i0.wp.com/nosisnews.com/wp-content/uploads/2023/08/image-9.png?resize=1024%2C452&ssl=1)
The huge tax gap was discovered through analysis of transactions made over the same time period involving nearly $55 billion in Bitcoin, Ether, and Tether on exchanges founded by Ukrainian citizens.
Delayed Regulations Impacting Tax Collection
Tens of millions of dollars in taxes are lost to the state each month as a result of the ongoing controversy over taxing cryptocurrency transactions. The ‘On Virtual Assets’ legislation, which established a legal framework for cryptocurrencies and was signed into law by Ukrainian President Volodymyr Zelenskyy in March 2022, has not yet been put into effect as of August 2023.
Ukrainian crypto enthusiasts on Telegram are asking about a potential “backpay” of taxes based on transactions over the previous ten years in response to this delay.
Related: Ukraine plans to adopt EU’s new cryptocurrency regulations
Tech Sector Resilience Amidst Challenging Times
Many areas of Ukraine’s tech sector have demonstrated resiliency despite the fear of missile threats during the Russian invasion in February 2022, citing about 5% yearly growth in export revenues. Industry personnel have supported Ukraine’s military endeavors despite the difficulties. The regulatory environment is still unpredictable, but Ukraine’s tech sector is proving that it can survive hardship and even prosper in it.