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Metaverse taxation: integrating virtual world into current tax policies

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With the metaverse booming to 400 million users, the challenge arises: how do we tax this burgeoning virtual world?

Metaverse is a virtual world where millions of people spend their time nowadays. To give you an idea of its popularity, there are currently about 400 million active users worldwide.

Back in 2021, the metaverse was valued at about $58.5 billion. Fast forward a few years, experts are saying it could skyrocket to a mind-blowing $1.5 trillion by 2030. This isn’t just a place for fun and games. It’s shaping up to be a serious contender in the global economy.

Now, with all this growth, a big question is popping up: How will we include this virtual economy in our existing tax systems? It’s like when online shopping became a thing, and everyone was scratching their heads about how to handle taxes.

A Harvard scholar Young Ran (Christine) Kim, who is part of the team at the Benjamin N. Cardozo School of Law, recently shared her insights in a research paper, opening up a conversation about the potential ways to approach taxation in the metaverse. It’s all about figuring out how to update our current tax policies to make sure they cover what’s happening in this rapidly evolving digital world.

Why does the metaverse need to be taxed?

So, why there’s a buzz about taxing the metaverse?

According to the findings in Kim’s research, it seems we can think of the metaverse as just another business sector. And just like any other sector, it should be part of our existing tax systems.

Let’s dive a bit deeper into the “why” here. This argument for taxing the metaverse isn’t just a spur-of-the-moment idea—it’s grounded in well-established theories and perspectives on regulation.

Whether it’s companies making profits, investments seeing gains, or people earning rewards in this virtual space, all these activities are quite s

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Author: Ankish Jain

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