The article is devoted to the study of cryptocurrency and its impact on the shadow economy. Transactions related to cryptocurrencies are anonymous, so it is very difficult to control them.It is cryptocurrencies that are used in the shadow economy, and this raises the problem of how to control transactions and what laws should be applied to regulate digital currency. The article analyzes the peculiarities of the cryptocurrency market, as well as the peculiarities of peer-to-peer payment systems such as Bitcoin, Namecoin, Litecoin, PPCoin, and Novacoin. The attitude to cryptocurrencies in the world is ambiguous; due to the pseudo-anonymity of cryptocurrencies, their use can be carried out through fraudulent schemes, in particular, financing the shadow sector - terrorism and drug trafficking. The author examines the possible interrelationships between cryptocurrencies and the shadow economy, highlights the main distinctive characteristics of cryptocurrencies and payment schemes using them, and analyzes the pros and cons of having competitive money in the country’s economic cycle.
Bitcoin, created by Satoshi Nakamoto, came into existence in 2008. Bitcoin is a virtual currency that has gained popularity worldwide, including in South Africa. It can be used as money or a means of payment or can be kept as an asset. For many years, virtual currencies operated free from legal regulations. Its decentralised network offers its users confidentiality because no-one can link any Bitcoin transaction to any user. This research study investigated the South African Taxation treatment of Bitcoin transactions. It also investigated the taxation legislation for Bitcoin transactions of the three countries selected for this study which are Canada, the United States of America and Australia, in order to establish best-practices that can be applied in South Africa. Bitcoin transactions can come into existence from the process of mining; obtained from barter transactions; and when purchased from Bitcoin vendors through the exchange of countries’ fiat money for Bitcoin, thus attracting taxation implications. The first research question was: What are the tax consequences of Bitcoin transactions in South Africa? This study found the following: the South African Revenue Service, cryptocurrencies are considered assets. The amount received or accumulated as per classification of gross income can be calculated using the value of cryptocurrencies. Cryptocurrency transactions can generate revenue that is subject to gross income taxation. The recipient taxpayer must include as gross income the value in South African Rands of a cryptocurrency, paid or accrued to him or her as contemplated in the definition of "revenue asset". It may be considered trading stock to receive Bitcoin with the intention of trading it for goods and services. Research Question Two was: What are the regulations governing, and tax treatment of, Bitcoin in selected countries? The findings can be summarised as follows: The United States of America (USA), Australia and Canada are clear that virtual currencies are not a legal currency and therefore cannot be classified as currency. Canada classifies virtual currencies as a commodity for taxation purposes. The USA and Canada have classified Bitcoin as property and intangible property respectively, which is similar to the approach in South Africa. The definition of a currency for all four countries is similar in the sense that there needs to be physical cash for the amount to be included as gross income for taxation purposes. Moreover, if Bitcoins are acquired with the aim of reselling or investment, Capital Gains Tax comes into play. None of the three nations' definitions of currency apply to virtual currencies. Research Question Three was: What is the difference or similarities between South African income tax consequences of Bitcoin and that of the three jurisdictions chosen for this study? The below is a summary of the results: South Africa, USA, Australia, Canada (specific that virtual currencies are not a legal tender and hence cannot be recognized as currency) Canada Taxes Crypto as a Commodity Bitcoin is labelled property by the USA and intangible property by Canada. This classification attracts Capital gains taxation, which is a similar approach to South Africa. All four nations have comparable definitions of currency, meaning that for an amount to be considered gross income for taxes reasons, actual cash must be present. Consequently, none of the four nations' definitions of currency apply to virtual currencies. Last but not least, virtual currencies are categorised as crypto assets since South Africa's asset definition encompasses assets of any kind, whether tangible or intangible. Virtual currencies were also categorised as commodities or property in Canada. The study recommends on how South Africa might enhance its current tax laws pertaining to Bitcoin transactions. The study also suggests future research that can serve as an extension of this study
This study analyses the growing importance of cryptocurrencies in Baluchistan, Pakistan, using the Rabby Wallet and Dex Screener to identify suspicious transactions linked to the Baluchistan Youth Council (BYC) in 2023.Baluchistan, one of Pakistan's least digitally connected areas, has adopted Decentralized Finance (DeFi) techniques, likely due to financial exclusion, surveillance avoidance, and informal remittance networks.The mixed-methods study analyses secondary data, tracks blockchain transactions, and reviews policy.Digital finance has structural constraints due to broadband penetration differences (15% in Baluchistan vs. 58.4% overall).Local traders, activists, and remittance beneficiaries may selectively adopt Rabby Wallet, according to wallet-level examinations.Event-window examination of Dex Screener data shows anomalous trading volumes, especially in low-liquidity tokens, amid BYC rallies and political mobilizations.These inconsistencies undermine cryptocurrency's significance in socio-political movements and its absorption into Baluchistan's shadow financial environment.The paper interprets these data using financial repression, technological adoption, and conflict economics.It contends that crypto adoption in Baluchistan is low but strategic in political finance and informal cross-border trade.The paper suggests improving financial inclusion, regulating decentralized platforms, and training investigators.This study illuminates how digital finance affects political movements in fragile regions and the risks and potential of bitcoin adoption in Baluchistan.
p class="MsoNormal"The cryptocurrencies that are an integrated part of blockchains have led to creating enormous value and wealth that attract increasing attention from investors and governments. The sophistication and anonymity of crypto assets create significant challenges for tax administrations as the current tax rules and guidelines in relation to them are either too broad or too complicated. This article proposes a simplified tax regime that would significantly reduce compliance and administration costs when taxing cryptocurrency for which the first taxable event occurs at the moment when crypto assets are converted to fiat currency or other real-world goods or serviceso:p/o:p
Non-fungible tokens (NFTs) have gained significant prominence in the crypto-asset market in recent years, with their use expanding across a wide range of economic sectors, which in turn raises numerous new tax challenges. This chapter analyzes the main controversial issues that NFTs raise in the area of indirect taxation and the challenges faced by lawmakers and tax authorities.
Eva Kicová, Juraj Fabuš, Natália Stalmašeková, Terézia Kvasnicová-Galovičová
Taxing Bitcoin and other cryptocurrencies presents a significant challenge due to their decentralised and pseudonymous nature, complicating enforcement and fostering regulatory inconsistencies across jurisdictions. This study systematically reviews the existing literature on cryptocurrency taxation, critically analysing 38 academic studies to identify key themes, challenges, and gaps in global regulatory frameworks. Using a structured seven-step methodology, it examines how jurisdictions approach cryptocurrency taxation, highlighting ten thematic categories, including jurisdictional comparisons, taxable events, and compliance mechanisms. The findings reveal persistent regulatory fragmentation and a lack of harmonisation, underscoring the need for international cooperation to establish coherent tax policies. By synthesising existing research and identifying unresolved issues, this study contributes to the discourse on balancing technological innovation with fiscal accountability, ultimately advocating for a unified, cross-border approach to cryptocurrency taxation.
Blockchain technology stands as a revolutionary force poised to reshape numerous sectors, including finance, supply chain management, healthcare, and beyond. Within the sphere of micro-economies, where conventional financial infrastructures often falter, blockchain emerges as a beacon of promise. This paper delves into the transformative potential of blockchain in empowering micro-economies, offering insights into its decentralized solutions and their capacity to uplift individuals and communities at the grassroots level. Through the examination of case studies and existing literature, this abstract elucidates the benefits, challenges, and future prospects of blockchain technology in fostering inclusive economic growth and fostering financial independence for marginalized communities.
The digital innovation accompanied by explicit economic incentives have fundamentally changed the process of innovation diffusion. As a representative of digital innovation, NFTs (Non-Fungible Tokens) potentially offer new revenue streams in the digital space. However, current researches mainly focus on transaction networks and community culture, leaving the interplay among diffusion dynamics, economic dynamics, and social constraints on Twitter. By collecting and analyzing NFTs-related tweet dataset, the motivations of retweeters, the information mechanisms behind emojis, and the networked-based diffusion dynamics is systematically investigated. Results indicate that Retweeting is fueled by Freemint and trading information, with the higher economic incentives as a major motivation and some potential organizational tendencies. The diffusion of NFTs is primarily driven by a “Ringed-layered” information mechanism involving individual promoters and speculators. The presentation of content contribute positively to the growth of the retweet network. This study contributes to the innovation diffusion theory with economic incentives embedded.
For several years now, transactions involving crypto assets have been flourishing, whether they involve buying or selling cryptocurrencies or non-fungible tokens (NFTs) or paying for the delivery of goods or services via cryptocurrencies. In this article, the authors provide an overview and address some of the issues of the Belgian VAT treatment applicable to transactions on cryptocurrencies.
Keshar Khati, Farha Khan, Lata Pande, Geetanjali Joshi · 5 authors
This study emphasizes on the potential of block chain based solutions in improving Goods and Services Tax (GST) compliance and transparency. The research aims to streamline GST processes, improve compliance levels, and enhance transparency in tax transactions, by applying block chain technology. This study focuses on highlighting the advantages of using the block chain technology in the administration of tax by employing a detailed analysis of the application of distributed ledger technology in the GST system. The findings of this secondary research are expected to offer valuable insights for policymakers, tax authorities, and businesses looking to improve GST compliance and transparency through innovative technical solutions. Block chain technology has shown promising results in different sectors, and its use in the administration of tax could significantly contribute to encourage a more transparent tax environment.
Over the last couple of years, an increasing number of organizations have arisen that are native to blockchain technology. Recent data shows that these decentralized autonomous organizations (DAOs) that are essentially ‘living on the blockchain’ are becoming increasingly popular. They are attracting substantial amounts of funds, operating both in the Web3 space and off-chain, and creating a significant source of novel tax issues. The existing tax academic research on DAOs is often limited to US domestic tax issues following from the DAO’s legal treatment. This article outlines (part of) the existing income tax landscape for the DAOs and some of the arising income tax challenges. The focus is on the general principles of domestic and international income tax systems. The authors argue that the DAOs create fundamental and practical tax issues potentially leading to income taxed ‘nowhere’. Existing tax frameworks cannot fully embed the DAOs and allow them to maintain their distinguishing features. The incorporation of DAOs does not necessarily solve the tax issues and even exacerbates them in certain cases. The authors call upon domestic and international legislators and policymakers to aim for more tax certainty for shareholders and further tax research of the DAOs.
This study examined the association between corporate cryptocurrency activities and tax avoidance outcomes, utilizing data from US public firms covering the period from 2015 to 2023. Financial data were sourced from Compustat, while details regarding cryptocurrency activities were manually extracted from 10-K and 10-Q filings. Our analysis employed a fixed-effects regression model to examine the impact of these activities on cash effective tax rates (ETR). The findings indicate that firms engaged in cryptocurrency activities tend to have a lower ETR compared with those without such involvement. Notably, this effect was predominantly observed in companies directly engaged in cryptocurrency activities, such as accepting cryptocurrency as a payment method or actively trading cryptocurrency on an exchange platform. In contrast, firms involved in crypto mining or initial coin offerings did not exhibit a similar association. Our findings offer significant regulatory insights for governance bodies concerned with the implications of corporate cryptocurrency activities on tax strategies.
In this article, the author discusses how decentralized autonomous organizations (DAOs), as blockchain-based electronic entities, are well-suited to a global digital economy. While challenges related to taxation persist, the author highlights the potential for more efficient tax collection in a digitally integrated world.
Abu Hassan Abu Bakar, Anwar Sanusi, Harsono Harsono
The issue of regional inequality has gained prominence during the era of progress, driven by the goal of promoting equitable development and enhancing the well-being of all segments of society. Papua Province is an integral part of Indonesia, and confronts intricate hurdles in addressing regional inequality. In response to these hurdles, special autonomy status and fiscal decentralization were implemented to boost regional autonomy. This study aims to scrutinize the impact of special autonomy and fiscal decentralization on regional inequality within Papua Province. The dataset used in the study spans from 2011 to 2021 and has been sourced from the Central Bureau of Statistics for Papua Province and the Directorate General of Fiscal Balance under the Ministry of Finance of the Republic of Indonesia. Multiple linear regression analysis was applied and the analytical results underscore that granting special autonomy status has exerted a noteworthy influence in diminishing regional inequality within Papua Province. Nevertheless, an unexpected finding is that fiscal decentralization has not substantially curtailed regional inequality within the region. These revelations provide a comprehensive overview of the roles played by fiscal decentralization and special autonomy in endeavors to alleviate regional inequality in Papua Province. The implications of these findings lay the groundwork for policymaking and developmental planning that foster inclusivity and sustainable progress within the Province of Papua. Keywords: special autonomy, fiscal decentralization, regional inequality
Decentralized Finance is still a growing sector that locks in billions of USD and serves as a platform for scammers to defraud investors. The most common fraud is the so-called rug pull, which has been researched for years. This paper presents the proposed approaches to combat this scheme and proposes a taxonomy to categorize solutions according to their best application. Solutions can be applied at three different levels. The first is at the service level, where the data is freely available on the blockchain. The second is at the user level, by deploying smart contracts that consist of preventive measures; and lastly, at the verifier level, which can prevent malicious transactions in the same way they prevent double-spending. This paper contributes in three ways. It gives an overview of all published approaches to predict and prevent malicious transactions. It also presents a taxonomy to facilitate development for specific use cases. Finally, it reveals a gap in the current research landscape.
Purpose This study aims to investigate blockchain technology (BT) and its opportunities and weaknesses in Iran's tax system; it addresses the opportunities and challenges of BT when incorporated into Iran's tax system. Design/methodology/approach The statistical population consists of all the employees and managers working in tax administration, and 674 participants were selected as the sample size via Cochran sampling. The partial least square tests are used to investigate the impact of the independent variable on dependent ones. Findings The results show that BT positively affects three components of tax, including value-added tax, tax on shipping goods and income tax. BT’s advantages and opportunities positively affect these taxation types, while its threats negatively affect the opportunities and challenges in Iran’s tax system; this study provides helpful insights and develops the knowledge. Furthermore, this is among the initiatives addressing BT’s opportunities and challenges in three discriminative taxation sectors, including value-added tax, tax on shipping goods and payroll tax. Originality/value Since no study has addressed BT’s opportunities and weaknesses in Iran’s tax system, it addresses the opportunities and challenges of BT when incorporated into Iran’s tax system.
Daniela Balutel, Walter Engert, Christopher S. Henry, Kim P. Huynh · 5 authors
Abstract This paper studies the dynamics of bitcoin ownership from 2016 to 2021, using the Bank of Canada's Bitcoin Omnibus Surveys. The estimated rate of bitcoin ownership jumped to 13% in 2021, up from the 5% observed in the previous three years. On one hand, this increase reflected broader economic trends related to increased savings and investment of Canadians during the COVID‐19 pandemic, along with financial technology companies providing accessible and user‐friendly platforms for buying bitcoin. Looking deeper, we use econometric models to quantify several specific ways in which bitcoin became more mainstream as an investment in 2021. Finally, we investigate the high cash holdings of bitcoin owners across time.
Should the government run an uncertain fiscal policy to finance its liabilities? We call the resulting uncertainty taxspots, and study conditions that make taxspots optimal and recurrent in standard Ramsey problems. We show that prudence and market incompleteness play a role in sustaining taxspots, and that equal-treatment randomizations can be decentralized via taxspots even in the absence of financial markets.
An important implication of regional autonomy is fiscal decentralization where regions have the authority to regulate and manage their own affairs including regional financial management but the increasing needs of the regions cause the financing of government and development programs/activities to also be greater so that the Central Government is stricter in matters of Transfers to Regions and autonomous regions including Sikka Regency must be independent through Regional Original Revenue (PAD) but the slow development and public services in Sikka Regency in 2023 due to low PAD caused by low Regional Taxes which only contribute 67.34% and Regional Retributions which only contribute 50.77%. This Policy Paper aims to achieve the target of Local Tax and Local Retribution fulfillment in 2024 and develop policy recommendations to achieve the target. A quantitative approach is used to analyze the percentage of Local Tax and Local Retribution achievements in the PAD Structure of the Sikka Regency APBD in 2023. In-depth interviews with civil servants of the Regional Revenue Agency to identify challenges and perceptions related to the PAD management process were also conducted. The results of the analysis show the low realization of local taxes and levies in Sikka Regency with contributing factors including potential PAD not yet well recorded or fully collected, ineffective local tax and levy collection systems and poorly recorded taxpayer and levy databases. To overcome this, the policy recommendation is the Sikka Regent Regulation on the Technical Guidelines for the implementation of local tax and levy management as well as efforts to pick up the ball on tax and levy collection to the community.
Mukhlishin Mukhlishin, Abdul Wahab, Bambang Setiaji, Magomed Tazhdinov
This research investigates the management and regulatory practices of zakat maal (wealth tax) in Malaysia, Turkey, and Indonesia, aiming to provide a comparative analysis grounded in empirical data. Methodologically, the study employs a comparative qualitative analysis based on secondary data from academic literature, government reports, and institutional publications. The results show, first, Malaysia employs a centralized and technologically integrated approach, ensuring transparency and efficiency in zakat collection and distribution. In contrast, Turkey adopts a decentralized model driven by non-governmental organizations and community participation, fostering flexibility but posing challenges in standardization and oversight. Indonesia's hybrid model combines governmental oversight with private sector involvement, aiming to balance regulatory control with local adaptability, yet needs help in coordination and public trust. Second, the policy enhancements such as improved coordination mechanisms, strengthened regulatory frameworks, and enhanced public awareness to optimize Zakat's role in poverty alleviation and social welfare across Malaysia, Turkey, and Indonesia. This research contributes to the broader discourse on Islamic finance and social policy by providing nuanced insights into zakat management practices, offering valuable implications for policymakers, practitioners, and scholars interested in enhancing zakat efficacy globally.