The Republic of Uzbekistan is preparing to implement a new cryptocurrency regulatory framework, which will include a 7.5 percent income tax on crypto-related salaries.
The Republic of Uzbekistan is moving forward with local cryptocurrency regulations, with Uzbek President Shavkat Mirziyoyev issuing a new decree governing the industry.
The new decree, which was issued on Wednesday, directs the reorganization of a major presidential agency known as the National Agency for Project Management (NAPM). The authority has previously promoted cryptocurrency trading in Uzbekistan, proposing that residents be allowed to conduct all types of cryptocurrency trades by 2021.
The NAPM will be restructured into a new entity called the National Agency for Perspective Projects (NAPP), which will be responsible for a wide range of crypto regulation-related projects with the mission of establishing a “special crypto regulation regime” in Uzbekistan, according to the decree.
The agency is responsible for developing and implementing a unified state policy on cryptocurrency, as well as ensuring investor protection and enforcing measures to combat illegal activities such as terrorism financing. The NAPP will also initiate and support projects that use blockchain and other emerging technologies in government and other socio-economic sectors.
The NAPP can create legal frameworks for entities that use crypto and blockchain technology, as well as virtual asset providers such as crypto trading and mining firms, industry stores, and others. The agency is also in charge of licensing and supervising virtual asset service providers, who must pay a variety of state fees. According to the document:
“Participants of the special regime have to pay mandatory deductions to all types of taxes and state trust funds, as well as customs payments for equipment, technological documentation, software […] imported for their own needs, not produced in the Republic of Uzbekistan […]”
Income from salaries earned by participants in the “special regime” is subject to personal income tax at a fixed rate of 7.5 percent, according to the document.
President Shavkat Mirziyoyev of Uzbekistan was re-elected for a second five-year term in October 2021, after taking office in 2016 following the death of longtime leader Islam Karimov. Mirziyoyev has launched several initiatives in the cryptocurrency industry since taking office.
Mirziyoyev established a state blockchain development fund in 2018, to integrate blockchain into public administration projects such as healthcare and education.
Mirziyoyev previously signed legislation prohibiting local companies from launching cryptocurrency exchanges in Uzbekistan. The law only granted legal status to cryptocurrency exchanges founded by foreign legal entities. In late 2021, some countries, such as Russia, echoed similar trends in crypto regulation policies.
