CANBERRA: The government of Australia is eyeing crypto traders as it establishes a taskforce to ensure tax compliance. If there’s one thing that’s near and dear to the hearts of national governments, it’s taxes. The gathering (and spending!) of revenue is what keeps the wheels of government turning. Of course, some cynical folks would say spending taxpayer money ensures that palms are greased and votes are bought.
No matter the case, governments frown at any attempt to circumvent paying taxes, which is where cryptocurrency comes into play. Australia is the latest country to begin working on keeping a closer eye on crypto transactions for tax purposes. Due to its decentralized nature, cryptocurrency does pose some tracking and taxation challenges for governments. The Australian government is worried that people are not paying their fair share of taxes due to gains made in the rise of cryptocurrency. There’s good reason for this fear as the recent IRS/Coinbase legal battle showed. When examining user accounts for the crypto exchange, the IRS found that only 0.2% of usersdeclared a loss or gain from their cryptocurrency trading The ATO is also looking into how to tax virtual currencies and what tax liabilities may exist. As of now, cryptocurrency is considered an asset for calculating capital gains and not as fiat currency for tax purposes.