Paraguay’s new bill may turn the country into mining heaven

On July 14, the Senate of Paraguay sent a bill to the President’s approval to allow crypto miners to use excess energy and be exempt from Value Added Tax (VAT). If the bill passes by the President, Paraguay might become the next target of the crypto mining companies.

Paraguay’s Mister of Technology, Information, and Communication, Fernando Silva Facetti, celebrated the new bill via his Twitter account.

1) #Cripto #Paraguay After an intense debate @SenadoresPy, we’ve approved the Bill that regulates #cryptoasset activities. This new law establishes obligations, rights and warranties to investors, to the consumer and the Government…. #Bitcoin pic.twitter.com/ODpQxC3XZy

— FernandoSilvaFacetti (@FSilvaFacetti) July 14, 2022

Highlights from the bill

The new legislative offer introduces two significant changes in taxation and energy usage of crypto miners.

Energy

Paraguay compensates 85% of its total energy usage from the power it generates from its two dams, Usina and Itaipu. Therefore, the country offers affordable energy. While this is a benefit to crypto miners, the new bill takes the energy benefits one step further by providing the excess energy generated by the dams to crypto miners.

In other words, crypto miners will get an additional discount on the already cheap electricity. According to the new bill, the state-owned energy company ANDE will be responsible for determining the available energy, it’s pricing, and channeling it to the designated delivery points.

Facetti explained ANDE’s responsibility in his Tweet and said:

“ANDE will define the technical and commercial conditions for the connection, and will establish a special electricity pricing rate which cannot exceed 15% above the industrial rate.”

Value Added Tax

In addition to the affordable electricity, the new bill also looks to exempt mining operations from paying the VAT. However, even if the bill passes, miners will still be responsible for other tax fees in the country.

Minister Facetti pointed at The National Security and Exchange Commission as the institution in charge of regulations. If the bill passes, the commission will be responsible for regulating and supervising all trading activities, custody, and emissions of cryptocurrencies. While it is not directly disclosed, miners’ tax payments also seem to fall under the commission’s control area.

Troubles of miners

The new bill may provide what the mining community needs these days.

Crypto miners have been facing real challenges due…