The Ukrainian parliament wants to begin taxing residents’ cryptocurrency-related profits.

Lawmakers proposed implementing a 5 percent tax on any cryptocurrency-related profits individuals and commercial entities see. These profits must be reported separately from other forms of income as well, according to the bill.

Further, commercial entities would see their taxation rate jump to 18 percent beginning on Jan. 1, 2024, should the bill pass.

The bill also suggests defining the concept of cryptocurrency within the country’s Taxation Code as “a virtual asset in a form of a token, which functions as a mean of exchange or a store of value,” as well as defining virtual assets as a “form of a digital record on the distributed ledger that can be used as a mean of exchange, unit of account or a mean of storing value.”

The bill also explains what crypto mining is.

The explanatory appendix for the bill notes that Ukraine hosted the early leaders of the mining industry and almost 30 percent of the global mining power, having been a home for the biggest bitcoin mining pool, GHash, at the time.

At one point in 2014, it controlled up to 55 percent of the total bitcoin protocol, raising questions if it could conduct a 51 percent attack, as CoinDesk reported at the time. But later, due to the regulation uncertainty in Ukraine, such companies left the country for friendlier jurisdictions like Canada, Georgia and Finland, the document states, leaving Ukrainians without a prominent money-making tool.

The document added:

“Given the current state of affairs, Ukrainians are deprived of the opportunity to raise funds and resources to develop their ideas and technologies through traditional instruments. So, last year, Ukrainian companies did not get a single dollar through an IPO (primary public offering) mechanism. At the same time, according to the Ukrainian association UVCA and Deloitte in 2017, 19 Ukrainian start-ups attracted $ 160 million or more than UAH (Ukrainian hryvnia) 4.3 billion through the ICO (the primary token proposal).

As Ukrainian authorities estimated, the country’s citizens own cryptocurrencies worth about 98.7 billion in the national currency, or about $3.5 billion, so legalization of the transactions with crypto assets will add at least $45 million in taxes annually in 2019-2024, the document says.

Image of Ukrainian hryvnia bills via Shutterstock