In a recent statement from the Australian Tax Officer or ATO, he said that authorities could not believe that crypto investors are great at keeping a record of the taxes they owe to the government from owning cryptocurrencies, despite trying their hardest.
Australian Tax Officer spoke on crypto taxation
According to the Australian Tax Officer, Chris Jordan, there are many cryptocurrency investors who are not capable of realizing the importance of reporting their taxes. Jordan spoke at the 14th International ATAX Conference on Tax Administration held on Nov 23.
The ATO, Chris Jordan, believes that there are plenty of investors who are still unaware of the fact that these blockchain-based digital currencies are assets and not currencies, and hence, citizens need to pay taxes on them.
The main concern for authorities is that citizens “believe their cryptocurrency gains are tax-free or only taxable when the holdings are cashed back into Australian dollars.”
“In a sector that is growing rapidly with new investors, we can’t rely on taxpayers knowing they need to keep records of their investment income and capital gains and disclose it on their tax returns,” said Jordan.
Government “nudging” people in the right direction
As per the statement of the Australian Tax Officer, the government is trying to “nudge” people to do what is right and report what they have earned from owning cryptocurrencies by taking steps like pre-filling data on returns.
Furthermore, Jordan mentioned that the monetary authorities have taken the help of cryptocurrency demand-side platforms (DSPs), share registries, and brokers to source out information and expand their data matching protocols.
As per the Australian Tax Officer, the government is still trying to figure out better ways to collect, share, and manage the data of cryptocurrency investors. But he believes that they’re just “scratching the surface.”
Jordan also noted that nearly 94% of individuals and 87% of small businesses file taxes and “do the right thing.” Australian authorities have a rather optimistic stance on cryptocurrencies.