There has been massive controversy about the latest reports from the Australian Tax Office that numerous Australian citizens, as well as companies, have been avoiding state tax laws by using cryptocurrency assets.
According to the ATO (the Australian Taxation Office), there are 60 investigations on-going, and Australia is directly involved in 12 of them. In these cases, large sums of cryptocurrency taxes were simply not reported or transferred outside of the country, through cryptocurrency tax crimes.
Have there been cryptocurrency tax crimes before?
These crypto tax avoidance cases are definitely not the only ones that have plagued Australia. There have been dozens of cases in the past. Especially when it comes to online gaming. In online gambling cases, players simply don’t want their bank accounts or exchange accounts to be traced. Therefore, they keep most of their cryptos on these third-party gaming websites. Such websites are normally located outside of Australia due to crytocurrency regulations.
Furthermore, the Australian tax law doesn’t do too much to prevent these cases in the first place. For example, the law dictates that every crypto exchange in Australia is responsible for reporting the trading activities and transaction histories of their customers.
However, traders easily avoided this by simply transferring to exchanges located in “non-partnership” countries. Mostly, these exchanges were based on the African continent.
How will this affect the Australian crypto space?
The ATO has already started forming a specific task force to combat such events in the future. The task force, which the authorities call J5, will commence operations within just a couple of days.
It consists of experts from Australia, the United Kingdom, the United States, the Netherlands and Canada. Therefore it will have a much larger scope of surveillance, meaning that there will be much less cryptocurrency tax crimes.
What the government could do in the future, is introduce much harsher punishment for avoiding crypto tax. That would still not be enough to prevent similar cases. In essence, it’s simply best to remove the crypto tax law and rely on consumer purchasing power growth.
In the end, if you apply an optimistic macro economic perspective, those taxes that the Australian state has “missed out on” would still come back but in the form of taxes from grown companies and enterprises.