Malaysian Moves To Legalize Crypto While Indian Government Slams Tax On Crypto Mining

Tax On Crypto Mining

Welcome back to the Tribe! In this post we dive into the new Tax On Crypto Mining and Malaysia aiming to legalize cryptocurrency!

Nothing should be considered investment or financial advice. Enjoy the ride!

Tax On Crypto Mining

The Indian government which had earlier this month proposed a 30% tax on profits from cryptocurrencies, recently extended the tax to crypto mining, despite maintaining a neutral stance on crypto regulation. Also in another news, a Malaysian minister urges the government to legalize cryptocurrency.

Why Tax Unregulated Crypto And What Does The Tax Cover?

The Indian government still maintains that cryptocurrencies remain unregulated despite the 30% tax imposed earlier this month. After imposing the tax on trading crypto, the government to the shock of investors extended the tax to crypto mining. 

The government’s stance is that legalizing and taxing cryptocurrencies are two different issues. Nirmala Sitharaman, the Indian finance minister noted that despite digital assets being unregulated, India has a sovereign right to tax them. She also maintained that they are taking the regulation one step at a time to prevent investors from scams, and other illegal activities.

While fielding questions, the Indian ministry of finance clarified that the cost of building mining infrastructure would not be eligible to be deducted as the cost of acquisition. Further, clarifying the parliament session on the new tax on mining cryptocurrency on whether infrastructure costs incurred in mining digital assets are to be treated as a cost of acquisition? Pankaj Chaudhary, Minister of State for Finance said:

“As per the proposed section, any income from the transfer of VDA shall be taxed at the rate of 30%. Further, while computing the income from the transfer of VDA, no deduction in respect of any expenditure (other than the cost of acquisition) or allowance is allowed.

As per the proposed provisions of section 115BBH, infrastructure costs incurred in the mining of VDA (eg. crypto assets) will not be treated as the cost of acquisition as the same will be in the nature of capital expenditure which is not allowable as a deduction as per the provisions of the Act.”

The Malaysian Ministry Of Communications And Multimedia Moves To Legalize Crypto In The Country

Crypto payments are illegal in Malaysia at the moment, the minister of finance even buttressed this stance earlier when he insisted that there was no change in the illegality of crypto. Despite this, the Malaysian Ministry of Communications and Multimedia (KKMM) is reportedly pushing for the legal adoption of crypto and NFTs in Malaysia.

According to a local news report by Harian Metro on Monday, the deputy communications and multimedia minister Datuk Zahidi Zainul Abidin is proposing that appropriate authorities should legalize certain use cases of crypto and NFTs in Malaysia.

The deputy minister emphasized the need to keep abreast with the growing trend, particularly because of the younger generation. He also hinted that the KKMM might have started exploring ways to ensure that more young people get involved in the industry. But he still recognized the fact that the responsibility for regulation rests on the shoulders of the financial regulators. 

According to Zahidi:

“We hope the government can try to legalize this matter so that we can expand the participation of young people in cryptocurrencies and help them in terms of energy consumption and so on.”

Some sources claim that Zahidi’s proposal goes beyond legalizing crypto and NFTs in Malaysia. It includes the hope that the country also adopts cryptocurrency as a legal tender, just as in El Salvadore.

Other News – Ontario Says Binance not Regulated

Another regulatory debacle for Binance as Canadian authorities say that the world’s leading crypto exchange has not complied with previous instructions and legal orders. Market supervisors in Ontario say the platform has continued to service investors in the province despite publicly announcing a withdrawal of the same offerings.

Read more here…

Tax On Crypto Mining News

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