Improved tax policies in the crypto sphere
The growth in the cryptocurrency sphere has been indeed groundbreaking, and as the year 2021 comes to a close we are seeing growths unprecedented in the crypto space as we have never seen before. Many believe it is a result of the increased interest by governments, institutional investors and inflation owing to the uncertainty of the Corona virus pandemic.
Be that as it may, we are experiencing an improved acceptance of cryptocurrencies that has made governments and investment institutions not only take more seriously its potential but begin to take measures to wholeheartedly accept them as a means of growth and development in their economies and even tax them or banish their use and miss out on the growth it comes with as well as the tax like my beloved nation Nigeria has done.
Source
According to Bloomberg's report on the PwC global rating of countries and their tax guidance on cryptocurrencies shows a huge shift in the stand on many countries on their involvement in the crypto space. For instance, Germany has moved up the PwC ranking from 20th to fourth in the 2021 ranking just behind Malta and Australia who are tied at second and Liechtenstein at the top of the lot. The Uk are 10th while the US sit 14th on the list.
You can find the complete list here.
With better tax guidance comes expectedly new and improved jurisdictions. This comes as a result of the increase in awareness by governments that businesses and individuals need some form of guidelines to be able to meet their tax obligations. Although no new or drastic change has been seen since 2017 and 2018, the adoption of cryptocurrencies as a legal tender in El-Salvador could begin new conversations that would see changes in the legislation of cryptocurrencies and consequently adequate taxing like we haven't seen before.
The advancement of blockchain technology is moving at breakneck speed as we have had huge developments in the NFTs (non-fungible tokens) that would also require some level of guidance, as does Defi (decentralized Finance) and many other sectors of the blockchain in order for adequate taxation on them to be exacted.
At the moment, it would seem like proper jurisdiction and guidance on crypto may be lacking but as we all get a better understanding of how, where and what we can use them for, the tax guidance for them would still seem a little vague.
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