Licensing Fees and Taxes: The Upside For Governments Embracing Crypto Regulation
The cryptocurrency and blockchain industries have pretty much stood unregulated ever since the Bitcoin (BTC) ledger was launched back in 2009. This means that for the last 9 years or so years, crypto enthusiasts, exchanges and traders have been enjoying the ride without answering to governments or any laws. This has been a good thing for this is the main point of decentralization through Distributed Ledger Technology.
But as much as John McAfee hates centralized governments, they are a necessary evil to maintain order in the various countries we live in. Whether it be an autocratic or democratic government, its mandate is to provide basic services to its citizens such as security, economic stability and healthcare. Governments achieve this through taxation, levies and fees for specific services.
With more countries embracing Crypto-regulation such as the Philippines, South Korea, Australia, Japan, Malta, Thailand, Kazakhstan and more, the corresponding governments will find a way to get their share of the crypto market action. One form is licensing fees as can be seen in the Philippines. The regulatory body there will rake in a cool $67 Million for issuing the 25 licenses it has set to approve. This means the funds collected can be diverted to other social services in the country.
The country of Australia is also working on taxing crypto profits for its citizens that have been stashed away their crypto loot in foreign jurisdictions. This will involve cooperation between the Australian authorities and other governments they have an agreement with when it comes to such matters of finance. The revenue collected from such individuals will once again probably fund the welfare benefits the country sets to distribute via blockchain technology. The country also aims at being a global leader in blockchain technology, A.I. and quantum computing. All these projects need some sort of funding and it will probably be sourced from taxing crypto trading.
In a nutshell, with cryptocurrencies and crypto-trading, comes a new way for generating revenue for any individual. With any income generated, comes the responsibility of paying taxes to the corresponding jurisdiction we live in. Crypto exchanges are also business entities that must declare profits and pay their dues in licensing fees and taxes accordingly. This is a reality we must embrace no matter how bitter it is to accept.
Besides, one of the unwritten universal laws in being a resident of this Earth, is to leave it a better place than we found it for the coming generations. If their lives will be made better through the schools, hospitals and technology developed from taxing crypto trading, then it is alright.
But the fees and taxes have to be within limits. We all know that one of the dangers of high taxation is a reduction in economic growth. Higher taxes means less individual capital to venture into investments and business enterprises. Therefore, the fees and taxes requested by governments with regards to crypto, have to be reasonable.
Disclaimer: This article is not meant to give financial advice. It is an opinion piece. The opinion herein should be taken as is. Please carry out your own research before investing in any of the numerous cryptocurrencies available.