For a year, the Paraguayan crypto law has been in its making, with lawmakers seeking to establish a detailed regulatory framework for crypto in the country. To this end, a crypto tax bill was introduced by Senator Fernando Silva Facetti in July 2021. And now, about a year later, the Paraguayan Senate approved the bill on July 14 after it passed Congress in May.
Having been approved by the Senate, however, all that remains is for the bill to be signed into law. This would be done by President Mario Abdo Benítez.
The Paraguayan crypto law in view
The bill, which is mainly focused on crypto miners and businesses, proposes the establishment of the Ministry of Industry and Commerce (MIC). This ministry will act as oversight of the entire crypto industry. And that includes miners, exchanges, and everyone involved in the crypto business one way or another.
Meanwhile, a local media report from ABC News also claims that crypto may be classified as securities. This is according to its July 14 report that crypto-based companies in Paraguay are set to be taxed similar to those dealing with securities. That is, although they will be exempted from paying Value Added Tax (VAT), they are captured in the income tax regime.
Modifications so far
Interestingly, the bill has reportedly undergone a series of changes in the last year, which has “improved the original project.”
First off, few detractors of the original bill expressed their concerns over energy consumption from mining among other things. Senator Enrique Bacchetta and Senator Esperanza Martinez were especially vocal in this regard.
However, crypto miners have now been placed on a budget and are required to interact with local power suppliers. That is, mining operations must report their energy consumption schedule to the National Electricity Administration (ANDE). And if any miner exceeds the planned consumption level, then ANDE holds the right to cut off their electricity supply.
Additionally, the bill now stipulates that crypto miners have to pay a rate 15% higher than those from other industries.