The Iranian National Tax Administration (INTA) has announced that cryptocurrency miners in the country will be given a tax exemption if they bring their foreign earnings back into the country, as reported by Financial Tribune, September 12, 2019. Oil exporters are given a similar tax break, so this shows how devoted the Iranian government is to transforming cryptocurrency mining into a legitimate industry.
Iran Steps Up Crypto Game
Miners in Iran will be elated at the proposition of tax-exempt earnings on cryptocurrency mining income. But with a 42 percent inflation rate, is it actually worth it?
The country’s miners believe the government overestimates the profitability of mining. According to regional sources, nearly 70-80 percent of the revenue goes back into the mining process in the form of electricity, cooling, and maintenance.
Iran is known for its cheap electricity tariffs. One kilowatt-hour (KWh) costs five cents compared to 12 cents in the United States. The government introduced new electricity tariffs for miners given the amount they are required to consume.
Efforts to legitimize the industry are proving fruitful despite the disparity in information between the various financial market authorities in the country. With government support, it is also possible that Iranian miners will be able to sustain their operations during periods of low mining profitability.
Fighting Sanctions With Bitcoin?
Iran has had heavy sanctions levied on them by the United States, and this has resulted in weak trade activity between Iran and other countries.
Supporting Bitcoin mining may be a tactical move by the government to amass a medium of exchange that the United States has no control over.
Situations like this highlight the ability of bitcoin to rise above global policy and run independently. Iran could leverage this situation and simultaneously contribute to the ecosystem.
The American government sanctioned a bank ban on Iran, prohibiting remittances into the country and rejecting remittances from the country. This has affected many people who have taken to bitcoin to overcome this obstacle. Chinese citizens are also pushing capital out of China through bitcoin and stablecoins.
In a world where power-tripping authorities try to meddle with everything, bitcoin is providing individuals with the freedom to transact and preserve their wealth.