Google
 

Aardvark Daily

New Zealand's longest-running online daily news and commentary publication, now in its 25th year. The opinion pieces presented here are not purported to be fact but reasonable effort is made to ensure accuracy.

Content copyright © 1995 - 2019 to Bruce Simpson (aka Aardvark), the logo was kindly created for Aardvark Daily by the folks at aardvark.co.uk



Please visit the sponsor!
Please visit the sponsor!

Could higher taxes boost crypto?

3 June 2021

Crypto-currency seems to be very popular with those who consider the laws to be advisory rather than compulsory.

Virtually all ransomware demands are made in the form of crypto-currency and it's also the backbone of dark web sites such as Silk Road where illegal goods or services are proffered for sale.

Now, with a recent announcement by Western nations that they are considering disempowering tax havens by way of altering the tax laws, it could be that crypto becomes the currency of choice for those looking to dodge their tax obligations -- perhaps even at a corporate level.

According to media reports the G7 nations have all-but agreed on setting a minimum tax rate of 15 percent, with G20 nations expected to fall into line with this number.

Another proposed change would be that the tax would be payable in the country where the taxable activities took place, rather than where the profits were billed by accountants. This may potentially eliminate the current situation where multinational corporations such as Google repatriate profits from relatively high-tax countries like New Zealand to lower-tax countries like Ireland to minimise their total tax bill.

Of course many wealthy individuals and families will be adversely impacted if these changes are implemented and that could see much of the currently declared earnings driven underground into crypto.

Might this spike a huge increase in the value of crypto -- as the rich and privileged start moving their wealth from conventional (visible) assets and cash holdings into far less visible and less trackable things such as cryptocurrencies?

I certainly hope that the same governments which now seek to claw back lost tax revenues by way of the proposed changes have systems in place to address the "disappearance" of so much wealth and revenue if those changes come to pass.

Given how dim-witted governments tend to be, I suspect the next move will be to either make crypto illegal or to try and regulate it in some way that would allow them to monitor trading and chase up the tax obligations of those who opt to trade in crypto.

Sadly, governments always tend to be a decade or two behind the curve so I expect they'll spend billions consulting on strategies and methods for addressing the crypto situation before coming out and claiming that it must be banned/regulated "to reduce crime". At this time they'll use the ransomware plague and trading on the dark web as justifications for declaring that the "unauthorised" holding or trading of crypto becomes illegal.

One thing's for sure... there are interesting times ahead!

Another challenge will be enforcing these proposed new tax laws in a world where it is possible to operate entire empires from a sandy bay on some equatorial island.

If a company is selling services via the Net from such a zero-tax location, how will foreign governments collect their 15 percent? Can we expect them to force banks and credit card companies to levy a digital tax on every transaction perhaps, or will companies operating outside the agreed tax accord simply be blacklisted and unable to receive payments at all?

Which of course brings us back to crypto-currencies and the prospect of significant regulatory restrictions or even a ban.

How do YOU see this playing out?

Please visit the sponsor!
Please visit the sponsor!

Have your say in the Aardvark Forums.

PERMALINK to this column


Rank This Aardvark Page

 

Change Font

Sci-Tech headlines

 


Features:

The EZ Battery Reconditioning scam

Beware The Alternative Energy Scammers

The Great "Run Your Car On Water" Scam

 

Recent Columns

Do not talk about racism
When I came to New Zealand in the late 1970s it was a harmonious nation of "Kiwis"...

I call Bullshirt!
There has been a lot of talk about hydrogen being the "green" fuel we need to fight climate change...

Lies and deception
Sorry, I'm talking about drones today -- or should I say I am NOT talking about drones...

Sorry for being old and late
Wow... it's lunchtime and I'm only just getting to the Aardvark column for the day...

Legalised malware
Increased surveillance by both state and private entities is causing growing paranoia within the ranks of the general public...

Oh no, the vaccine will kill me!
I published a video last week in which I mentioned that I had received my first jab of the Pfizer Covid-19 vaccination...

That's working well then
The NZ government has made some sweeping changes to our gun laws of late...

Tipping point?
I read a couple of very interesting articles recently...

CV19, is the worst far from over?
July 19 is to be "freedom day" in the UK...

Plague, pestilance, now famine?
I'm not a religious person but I do admire the Bible, albeit more as a work of wonderful ambiguity than one of fact...

I got nothing
I've scanned the news-wires this morning for inspiration and I've got nothing...