The US has been rather slow to act when it comes to implementing taxation laws and regulations for the cryptocurrency space, and one US Congressman by the name of Ted Budd has called it a “national security issue”. In a testimony to the House Ways and Means Committee of the United States House of Representatives, Budd called for bi-partisan support to help push crypto tax bills through congress to ensure America stays on top in the crypto and blockchain space. However, it appears as if Budd was talking to an empty room, as the moment he brought up blockchain technology, the last few congresswomen in the room left, meaning his speech fell on deaf ears.
Stifling the US Crypto Economy
Budd’s testimony demanded action and help to pass the Cryptocurrency Tax Fairness Act and the Virtual Value Tax Fix of 2018 through congress. Currently, adoption rates in America are low, Budd hopes that by passing bills such as this that adoption rates will slowly start to climb as the industry becomes less murky. Traders are routinely exposed to double taxation on crypto events, meaning you have to pay tax twice when opting to use crypto for a purchase – once when you acquire the crypto and the second when you swap the crypto for goods or services.
“National Security Issue”
Calling these problems a national security issue might be one step too far, but Budd is trying to make a point. If the US doesn’t act fast and create tax laws that are fair and easy to understand, then the US could lose out on income from the crypto world, as well as lose business to other countries that are implementing crypto-friendly tax laws. For example, Ukraine has implemented tax laws for cryptos and so too has Poland. As more fringe nations like these implement tax laws, more businesses will begin moving there as the tax rate becomes more favorable.
Governments Weighing in
Tax agencies and governments from all around the globe are all throwing their hats into the ring. Earlier this year, Her Majesty’s Revenue and Customs (HMRC) launched guidelines for people filling in their tax returns if they have dabbled in crypto. While it’s a far cry from crypto tax regulations, it is a lot more than the IRS is currently doing in the US. Meanwhile, in France crypto tax amendments were shot down after Richard Ferrand – the President of the French National Assembly – said it would be unfit for him to pass the amendments due to his lack of knowledge in the area.
Crypto taxation is still a burning issue, but some states are trying to fight it on their own. Several states have now launched their own tax and crypto regulations, with others quickly following suit. If congress doesn’t act quickly, the US could end up losing out on a huge chunk of crypto tax and even force crypto businesses to set up in other countries.