Would Bitcoin enhance taxing and provide more effective ways for governments to make citizens accountable, or would it create a hole for users of the currency to evade tax? Cointelegraph asked experts how Bitcoin could affect certain government and societal processes such as taxation.
The pro-Bitcoin divide will be quick to tell how the cryptocurrency will positively revolutionise the associated processes, while those against will always tend to point out the deficiencies and possible pitfalls of Bitcoin and its associated technology, the Blockchain. Bitcoin has multiple definitions
The CEO of Netcoins , Michael Vogel , while speaking to Cointelegraph, says that many people do not really understand the full capacity of Bitcoin.
He says: “I think something many people find puzzling, especially when they are new to Bitcoin, is that Bitcoin has multiple definitions depending on your jurisdiction.” Vogel says that the basic questions anyone new to Bitcoin asks are “Is Bitcoin a currency or a commodity?” and “Are Bitcoin transactions subject to tax in your area?”
Vogel tells Cointelegraph: “In terms of VAT/GST (sales taxes), Bitcoin actually provides the potential for automated tax remittances. In general, retail businesses keep track of their monthly transactions, and then remit sales taxes due at the end of the month. Using a form of smart contract, perhaps via a Bitcoin payment gateway, sales taxes could be remitted to governments in real time. This provides a direct benefit to government over cash, which is often a massive grey area for off-balance sheet transactions where tax is rarely collected.” It all boils down to proper regulation Another expert who spoke to CoinTelegraph on the issue is Dmitry Lazarichev , Founder at Wirex .
Lazarichev says that Bitcoin being a conceptually new type of money has significantly changed our mindset. He explains that there has been a solid taxation […]
