The IMF categorised cryptocurrencies as an “impediment” to tax collection

Cryptocurrencies an obstacle to taxes

International Monetary Fund officials believe that governments have yet to consider possible ways to tax cryptocurrencies, as the amount of duties not imposed and collected could run into the tens of billions of dollars.

Experts noted that the task of tax officials is complicated by the semi-anonymity of cryptocurrencies, their dual nature as an investment instrument and means of payment, as well as their high volatility.

There is no consensus on whether cryptocurrencies should be treated for tax purposes as income, capital gains or gambling.

The IMF cites a study that the crypto market in the US is adapting to new Internal Revenue Service (IRS) rules, reflecting attempts to evade fees. However, the IMF noted the paucity of analyses and empirical data in this area, despite the availability of large amounts of information on crypto transactions.

Another of the drawbacks is the popularity of digital assets in emerging economies, where data collection technologies may be limited. However, experts noted that the FBI also does not disclose the methods of seizing cryptocurrencies.

In addition, the crypto market is divided into large and small holders, which may also require a separate approach. The proper construction of the tax is crucial. For example, a flat rate tax could be imposed on anonymous transactions. The problem is not anonymity but technology, as tax authorities are “incapable of embedding themselves in blockchain.” However, blockchain technology and smart contracts can facilitate tax administration by ensuring security and compliance in withholding levies.

Centralised exchanges offer more opportunities than decentralised exchanges to control tax compliance. At the same time, mandatory compliance with anti-money laundering measures and customer verification are insufficient for tax purposes, the paper argues.

According to the authors, the starting point in the formation of tax legislation for the cryptosphere could be the tightening of reporting requirements for miners.

About the author

Смотрите также