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IMF eyes tens of billions in crypto asset taxes, has few suggestions for collecting them

Press Releases Crypto News Cointelegraph IMF eyes tens of billions in crypto asset taxes, has few suggestions for collecting them

Governments have yet to address all the ways crypto might be taxed, the International Monetary Fund (IMF) has realized, and the amount of taxes not imposed or collected may reach well into the tens of billions of dollars. That insight does little to reduce the variety of challenges in taxing crypto, however.

Crypto’s “semi-anonymity,” its dual nature as an investment vehicle and a means of payment, and its high volatility complicate the tax collectors’ task beyond their current abilities, a new IMF working paper said. There is no consensus yet even on how to tax cryptocurrency — as income, capital gains (which is most common) or gambling — and it doesn’t help that tax systems were designed before the emergence of blockchain technology, which has spun out a range of assets that needs separate treatment.

The paper noted that crypto is not an especially effective means for tax evasion due to its high fees and volatility. However, if the potential for crypto tax collection could be harnessed, “corrective” taxation could help offset the undesired influence of crypto on macroeconomic factors, as well as further ecology goals. The paper noted that green taxation is being explored, but more mechanisms must be considered.

The paper cited research monitoring crypto transactions relative to statements by tax authorities in the United States. It showed that the market does respond to tax authorities’ guidance, sometimes indicating new attempts at evasion.

There is “relatively little analytical work or empirical evidence to draw on” even though the “vast amounts of data are in principle available on transactions in cryptocurrencies,” the IMF said. The popularity of crypto in emerging economies, where collection technology

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Author: Derek Andersen

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