IMF says existing taxation tools are not sufficient for the crypto sector
The International Monetary Fund (IMF) raised questions over the traditional tax rules & technologies, which are not fit for the crypto sector.
Crypto & blockchain technology adoption is surging rapidly in the world. Almost every tech & finance company is exploring the better use cases of cryptocurrencies & back-end technology, to remain top in the race of technology adoption against rival companies. At present huge numbers of cryptocurrencies with different nature are available for the crypto Investors & traders and the different type of nature is causing different levels of issues for the regulatory bodies.
Recently the International Monetary Fund (IMF) published a research paper to point out that the majority of government agencies are struggling to deal with the crypto sector. In particular, the IMF agency noted that the tax authorities are not able to implement their tax rules against the cryptocurrency’s activities with high precision.
According to the IMF, all the tax rules are very old & they were made before the existence of crypto, so it is not easy to implement traditional tax measures on this innovative sector.
Furthermore, the report noted that different crypto assets pose different types of nature, on one side there are those crypto assets that are transparent & traceable, and on another side, there are those Crypto assets that are anonymous & no one can trace easily.
People use cryptocurrencies for investment purposes & also for payment purposes and this is another factor that is causing a big challenge for the tax authorities to find out whether people are investing their money in crypto or using it for payment purposes.
To fight against such challenges, the IMF suggested government agencies bring new measures & study this sector more deeply and if they will be able to spend time on this sector then in that situation they will be able to collect taxes from this sector more perfectly.
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