Cryptocurrencies are killing Taxation Laws : Tax 2.0 Coming Soon

Photo by The New York Public Library on Unsplash

Tax Collection :

We all know tax is the biggest source of revenue for the government, tax is used to ensure the government has funds to provide facilities for the citizens. While tax is applied to almost everything from salary, capital, goods, service, and more, we are going to discuss income tax and its relationship with cryptocurrency.

In many countries, the tax laws are very complex and outdated. Sometimes making money is way easy than filing the taxes for it. The details and implications of keeping strict records are painful for the majority of citizens.

Cryptocurrencies Replacing Banks:

With the blockchain revolution, things are changing fast cryptocurrencies have become a root financial means of cross borders funds transfer. With time cryptocurrencies like Bitcoin & Ethereum are accepted on more and more platforms.

People love the idea of being their bank. Things are moving fast in favor of cryptocurrencies.

Cryptocurrencies Replacing Stocks :

Failing to stop cryptocurrencies and blockchain technology from replacing traditional banking structures, the governments have adapted to cryptocurrencies and accepted their fate.

While in stock markets if you lose money, you are able to carry your losses on the next financial year, have certain schemes where you are even appraised for investing in countries economy by giving you tax benefits.

The government is giving no such rewards for cryptocurrencies trades and investment, But Government is keen on still getting their fair share of profits that you make on your personal risk.

Tax on Cryptocurrencies :

While the government wants taxation on cryptocurrencies, the public is enraged and wants to evade taxes.

Since most of blockchain is public that doesn’t mean that we don’t have scope for anonymity, one particular coin Monero (XMR) is famous for the same reason. Many onchain tools such as Tornado Cash makes it an easy thing to shuffle your funds across multiple wallets.

People are underreporting their cryptocurrency holdings, that’s if they report it at all. People are cashing a small amount of money to pay bills and expenses, and keeping a large amount of money hidden in the crypto assets.

In this way, individuals only have to pay tax on a very small amount, and most of the amount is hidden from the government so no tax on that amount.

Who is to blame :

Outdated Taxation System: The taxation system we use goes back to the golden age where coins were used as the currency, no major improvements other than making this digital have been done yet.

Some say taxation is the golden age was much more streamlined and easy than as is today.

Government Lack Of Transparency: The government is known to hide money trials, when we tax we have no idea how much tax was collected and how it is being used.

Government — Inflation: With countries printing more money than ever, the purchasing power of the dollar is at an all-time low.

Solution:

We should focus on some new tax collecting schemes

Equal Tax (Citizen Tax): People should pay a fixed amount of tax per head, these taxes should go to maintain basic human services.

Residential Tax: People should pay taxes on the land size they own, these taxes should go straight to defense agencies for protecting the countries against the war or any clash.

Remove Income Tax: Remove the income tax and allow hassle-free cross borders payments.

Improve GST/VAT: The only good source of taxation for the government is GST/VAT, which can be increased.

We think that taxation is dead now and government should come up with something like Tax 2.0, which derives a majority of income through VAT/GST & allows for cross countries economy to exist.

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https://moneymafia.eth.limo

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