This study examines the implementation of the NFT phenomenon and how legal protection and tax enforcement are for NFTs.Non-Fungible Tokens or NFTs are digital assets that can be traded with cryptocurrencies, NFT assets themselves consist of digital art, music, moving images (GIFs), videos and several other digital assets.This study uses a normative juridical research method with a statutory approach, which in this paper analyzes how legal protection is in laws and regulations for works of non-fungible tokens (NFT) and examines the taxation of NFTs.This study obtained the result that thereis no legal regulations regarding the existence of NFTs in Indonesia, which aims to create guarantees of protection and legal certainty.In addition, NFT does not yet have tax law provisions, therefore it is necessary to formulate these NFT tax law provisions.
• We study governance mechanisms in decentralized autonomous organizations (DAOs). • Regression discontinuity design on contested proposals overcomes endogeneity concerns. • Distributed governance mechanisms increase tokenholders value. • Proposal passage increases DAO token returns by 4.7 % at the margin. • Effect amplified by voter participation, DAO democratization, and DAO decentralization. Distributed governance mechanisms increase tokenholders value in decentralized autonomous organizations (DAOs) when decision-making is contested. Using a comprehensive dataset of proposals voted on within blockchain-based DAOs from 2020 to 2024, we exploit a regression discontinuity design on proposals that pass or fail by a close margin around the majority threshold. Local average treatment effects indicate that proposal passage increases DAO token returns by 4.7 % at the margin. Further, a one standard deviation increase in vote participation amplifies this effect by 2.2 %. Proxies for democratization and decentralization also increase the value-creating effect of contested decision-making in DAOs. Our findings contribute to understanding how distributed governance structures create value in digital organizations.
The exponential growth that the cryptocurrency market has seen in the past decade has caused much discomfort among governments across the globe, owing to the unregulated nature of transactions and what some may argue is a disproportionate impact of the crypto market on domestic economies. The natural response of most jurisdictions has been to tax cryptocurrency transactions so as to discourage them while also gaining revenue out of them. However, taxation policies face complex questions of determining the true nature of crypto transactions, a question that is yet to be answered with clarity. The knee-jerk reaction that the industry has attracted from the Indian government in particular has materialised in the form of imposition of a virtual digital assets tax on cryptocurrencies. The authors argue that this policy failed to effectively address its objective and only resulted in a sudden downfall of the crypto market in India, creating negative repercussions for the domestic economy. The authors then employ a game theoretical analysis to propose an alternative taxation framework that recognizes the significance of the crypto market and better balances the need for its regulation. Further, they discuss frameworks from a range of external jurisdictions to analyse the expected implications of similar policies in the Indian economy.
Carol Nalubanga, Edmand Bakashaba, Muhammad Sendagi
Background. Aim: To determine the relationship between municipal government revenue collection and service delivery in Rukungiri Municipality. Methodology A case study, descriptive, cross-sectional research design was used for this study. The study adopted both qualitative and quantitative approaches. A case study design was adopted because it enabled the researcher to carry out an in-depth investigation into the concepts under study. The entire population of Rukungiri Municipality is targeted in this research. Also, the municipality has 51 civil servants/technical staff, 20 political leaders (councilors) at municipal and Division levels, 20 taxpayers, 7 service providers, and 25 community projects’ beneficiaries. This is based on different stakeholders’ information relevance in their respective positions. Therefore, the population of the study was 1400 people. A sample of 302 respondents were selected Results One of the findings mentioned is the importance of local revenue in decentralized societies. While it’s true that local revenue plays a significant role in financing local government operations and service delivery, it is important to consider the capacity of local governments to effectively collect taxes. Many local governments in developing countries face challenges in revenue collection, including limited tax bases, weak tax administration capacity, and high levels of tax evasion and informality. Therefore, simply relying on local revenue may not be sufficient to meet the financing needs of local governments and ensure adequate service delivery. Conclusion The findings indicate that there was a positive and moderately strong relationship between revenue collection and service delivery (r = 0.719). This relationship implies that the municipality is using its collected revenue to fund its expenditures for service delivery. Recommendation Strengthen local revenue collection: Rukungiri Municipality should enhance its capacity to collect local taxes and fees efficiently. This can involve investing in modernizing revenue collection systems, training staff, and conducting public awareness campaigns to ensure compliance.
Alex Berke, Tobin South, Robert Mahari, Kent Larson · 5 authors
Tax returns contain key financial information of interest to third parties: public officials are asked to share financial data for transparency, companies seek to assess the financial status of business partners, and individuals need to prove their income to landlords or to receive benefits. Tax returns also contain sensitive data such that sharing them in their entirety undermines privacy. We introduce a zero-knowledge tax disclosure system (zkTax) that allows individuals and organizations to make provable claims about select information in their tax returns without revealing additional information, which can be independently verified by third parties. The system consists of three distinct services that can be distributed: a tax authority provides tax documents signed with a public key; a Redact & Prove Service enables users to produce a redacted version of the tax documents with a zero-knowledge proof attesting the provenance of the redacted data; a Verify Service enables anyone to verify the proof. We implement a prototype with a user interface, compatible with U.S. tax forms, and demonstrate how this design could be implemented with minimal changes to existing tax infrastructure. Our system is designed to be extensible to other contexts and jurisdictions. This work provides a practical example of how distributed tools leveraging cryptography can enhance existing government or financial infrastructures, providing immediate transparency alongside privacy without system overhauls.
Decentralization holds a significant role in the context of decentralized autonomous organizations (DAOs), with its nature being not a fixed value but a comparative spectrum. Prior research investigating the measurement of decentralization in nations’ governance system provides a foundation for our current study. This research aims to integrate these insights to define dimensions and indicators, tailored explicitly for assessing decentralization levels within DAOs. Then, the article undertakes an examination of the suitability of traditional decentralization measurement approaches within the unique DAO context, employing confirmatory factor analysis (CFA) as our analytical tool based on a total of 44 DAOs. Hence, the results suggest that DAOs have three dimensions for measuring decentralization, ‘political decentralization as a participatory engagement’, ‘economic decentralization as a resource distribution’, and ‘administrative decentralization as the self-governing execution of decisions’. By substantiating the applicability of established decentralization measurement frameworks within the unique context of DAOs, the findings not only enhance the understanding of this emergent governance paradigm but also provide DAO practitioners, policymakers, and researchers with invaluable insights.
This paper provides a brief explanation of the block chain and the concept of “crypto currency”, followed by an analysis of Bitcoin for permissibility from the point of view of Shari‘ah. The decisions of well-known houses of fatwas were considered, and a number of criteria were developed and adopted with the help of which the Shari‘ah position of a particular crypto currency can be assessed. The article identifi es provisions and decisions that can become the basis for issuing fatwas related to issues that concern many Muslims who care about the permissibility of their earnings.
Sruthy Anand, Sai Shibu N B, Kalla Likhit Sai Eswar, Koganti Sri Sai Harshith · 5 authors
Blockchain is a distributed ledger that stores information on networked nodes, ensuring that a single node cannot alter the data. Blockchain has become popular for decentralized and distributed applications, especially managing financial records. This paper examines the importance of using blockchain to maintain decentralized ledgers for self-help groups running micro-finance for rural women in India. This paper provides a comprehensive overview of blockchain technology and its various applications. It also investigates the factors that influence the adoption of this technology by the community. This paper also acknowledges the challenges posed by the digital divide in rural villages, which make it difficult for people to accept and utilize this technology. The paper aims to enhance transparency in governance and create a secure financial module by integrating blockchain technology.
This paper delves into the role of technological tools in bolstering cryptocurrency tax compliance for individuals and businesses, addressing the challenges posed by the decentralized and anonymous nature of cryptocurrencies. The investigation revolves around the necessity and effectiveness of software and platforms like CoinTracker, CryptoTrader.Tax, and TokenTax, which aid in monitoring, reporting, and ensuring compliance with tax norms. These tools exemplify the innovation required to reconcile the discrepancy between decentralized cryptocurrencies and centralized tax compliance, mitigating legal risks. Moreover, the inherent characteristics of blockchain technology, including its immutability and transparency, coupled with smart contracts, revolutionize tax compliance by creating tamper-proof transaction records and automating tax calculations and payments. Nevertheless, the implementation of these technologies raises concerns regarding data privacy and security, necessitating robust legal and ethical frameworks. Additionally, the evolving cryptocurrency market, characterized by developments like DeFi, NFTs, and novel blockchain protocols, demands continual adaptation and innovation from these technological tools. Countries with favorable tax environments for cryptocurrencies, such as Germany, Singapore, and Switzerland, are also explored. The paper concludes with comprehensive recommendations for implementing a robust model for taxing cryptocurrencies, emphasizing the significance of employing blockchain analysis software, comprehensive tax software, Artificial Intelligence, APIs, cloud computing, and educational platforms. These tools, integrated meticulously, ensure accuracy, efficiency, and foster a knowledgeable environment, thereby facilitating adherence to tax norms in the rapidly expanding cryptocurrency domain.
Real-world contractual agreements between firms are often incomplete, leading to suboptimal investment and loss of value in supply chain relationships. To what extent can blockchain technology help alleviate problems arising from contractual incompleteness? We examine this issue by exploiting a quasi-natural experiment based on the staggered adoption of U.S. state laws that increased firms’ in-state ability to develop, adopt, and use blockchain technology. We find that, after exposure to a pro-blockchain law, firms with greater asset specificity exhibit more positive changes to Tobin’s Q, research and development, and blockchain-related innovation. Also, such firms appear to rely less on vertical integration, form more strategic alliances, and shift their emphasis to less geographically proximate customers. Overall, our results suggest that blockchain technology can help firms remedy constraints and inefficiencies arising from contractual incompleteness. This paper was accepted by Will Cong, Special Section of Management Science: Blockchains and Crypto Economics. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2022.04139 .
Allah Ditta Nawaz, Niaz Ahmed Bhutto, Shabeer Khan
Abstract The global challenge of tax evasion presents a profound impact, leading to diminished tax revenues that are the lifeblood of a nation's seamless operations. This issue is exacerbated by the ingenious strategies employed by tax evaders, which distort economic performance benchmarks and create financial imbalances. Amidst these concerns, cryptocurrencies have emerged as a contentious subject, accused of abetting tax evasion. The covert nature of cryptocurrency transactions poses a significant hurdle for regulatory oversight and transaction recording. In response to this burgeoning concern, our comprehensive study delves into the intricate interplay between cryptocurrencies and tax evasion, utilizing annual data spanning from 2013 to 2020. With an extensive scope testing thirty two hypotheses and twelve interaction terms, our research unfurls the multifaceted dynamics at play. This study embarks by constructing a latest tax evasion index for the esteemed G-7 nations. Employing asymmetric/symmetric panel techniques, our investigation unveils a compelling revelation: cryptocurrencies exert a counteractive influence on instances of tax evasion. Furthermore, the nexus between economic performance and cryptocurrencies bears considerable sway over their correlation with tax evasion. Innovatively, our research charts the intricate relationship between tax evasion and cryptocurrencies across varying levels of economic performance. Notably, our findings underscore that Economic Freedom, Government Integrity, Government Spending, Business Freedom, Labor Freedom, Monetary Freedom, Investment Freedom, and Bureaucracy function as moderators, influencing the association between tax evasion and cryptocurrencies. These insights transcend academia, delivering significant implications to policymakers with informed guidance to devise nuanced strategies and policies.
In the mid-1990s I wrote the first English-language book on local government in Latin America (Nickson, 1995 ). At that time there were also very few works on the subject in Spanish or Portuguese. The tardy appearance of works on such a topic reflected the long history of centralization and the long-standing neglect of academic investigation of sub-national governance in the region. The information available was so limited that in the case of some countries (notably Argentina) it was even difficult to obtain an accurate figure on something as basic as the number of municipalities. The book covered the history of local government since the late colonial period, its legal status, its structure, local service provision, local finance, electoral system, administrative organization, citizen participation, and inter-municipal relations. It also provided descriptive profiles of municipal government in 18 countries in the region. Since then there has been an explosion of publications on local governance in the region, highlighting the transformation that has taken place in the wake of a major decentralization process than had begun a decade earlier. Several studies agree that a significant leap has been made in the level of decentralization in Latin America (Bossuyt, 2013 ; Carrera, 2013 ). This period of time is sufficient to assess the impact of this transformation.
A government's primary duty is to provide its people with public services, for which it needs funding to cover its costs. Taxation, among other things, serves as a significant source of funding for public spending. The government has been able to uncover new avenues for revenue collection because to technological advancements. The peculiar issue of cryptocurrency taxation in India is one of them. Cryptocurrencies, in contrast to fiat money, are decentralized and run on a peer-to-peer infrastructure that is free from outside interference, such as that of the Reserve Bank of India. This Article's goal is to investigate cryptocurrencies and the current regulatory framework around them. It explores the various forms that cryptocurrencies can take and analyses (1) the domestic legal framework that currently exists and how it relates to cryptocurrencies, (2) domestic laws that affect how cryptocurrencies are taxed, and (3) The reactions of the world's major economies to cryptocurrencies
The global backlash against tax havens has pushed secrecy-seeking capital to explore alternative opportunities in non-tax-haven countries and new financial technologies (FinTech). We identify two major corporate practices—organizational ring-fencing and swarming—that have enabled secrecy-seeking capital to adapt to new regulatory realities and illustrate these practices empirically with the extreme case of Estonia. In the 2010s, several Nordic banks turned their Estonian offices into hotbeds of high-risk transactions, ring-fencing their Baltic affiliates from their group-level systems and generating several money laundering scandals with global repercussions. More recently, secrecy-seeking capital ‘swarmed’ into Estonia’s large cryptocurrency sector and thereby thwarted effective supervision of the activities of the firms involved. Neither swarming nor organizational ring-fencing have been sufficiently explained by existing approaches in International Political Economy (IPE) as new core practices of secrecy-seeking capital. We study both practices in a mixed-methods research design and provide novel empirical insights to illuminate this phenomenon. In filling this gap, our study paves the way for a second generation of global tax governance scholarship amidst the cryptocurrency and FinTech boom, and calls for a research agenda that addresses these new practices that take advantage of the lack of administrative capabilities in non-tax-haven jurisdictions.
Katherine Baer, Ruud de Mooij, Shafik Hebous, Michael Keen
Abstract Policy-makers are struggling to accommodate cryptocurrencies within tax systems not designed to handle them; this paper reviews the issues that arise. The greatest challenges are for implementation: crypto’s pseudonymity is an inherent obstacle to third-party reporting. Design problems arise from cryptocurrencies’ dual nature as investment assets and means of payment: more straightforward is a compelling case for corrective taxation of carbon-intensive mining. Ownership is highly concentrated at the top, but many crypto investors have only moderate incomes. The capital gains tax revenue at stake worldwide may be in the tens of billions of dollars, but the more profound risks may ultimately be for VAT/sales taxes.
Blockchain can enable small countries to overcome systemic constraints and strengthen their economies. Based on dynamic capabilities theory, we develop a conceptual framework that explores the applicability of blockchain for fostering economic development. Specifically, we postulate that the agent’s role in dynamic capabilities theory can be extended from the organisation level to the country level. Our proposed framework integrates blockchain as an economic driver and dynamic capabilities on higher-order and lower-order levels (i.e., business and investment development, human capital development, financial system enhancement, regulatory framework improvement, and systems and infrastructure improvement) to show their impacts on different aspects of economic development. International regulatory and political factors serve as moderators that determine whether a national blockchain-based strategy will ultimately be successful. In summary, we illustrate how blockchain as an enabler of dynamic capabilities can contribute to a small country’s economic development.
As the decentralized finance industry gains traction, governments worldwide are creating or modifying legislations to regulate such financial activities. To avoid these new legislations, decentralized finance enterprises may shop for fiscally advantageous jurisdictions. This study explores global tax evasion opportunities for decentralized finance enterprises. Opportunities are identified by considering various jurisdictions’ tax laws on cryptocurrencies along with their corporate income tax rates, corporate capital gains tax rates, level of financial development and level of cryptocurrency adoption. They are visualized with the manifold approximation and projection for dimension reduction (UMAP) technique. The study results show that there exist a substantial number of tax evasion opportunities for decentralized finance enterprises through both traditional offshore jurisdictions and crypto-advantageous jurisdictions. The latter jurisdictions are usually considered high-tax fiscal regimes; but, given that they do not apply tax laws, tax evasion opportunities arise, especially in jurisdictions that have high financial development and high cryptocurrency adoption. Further research should investigate these new opportunities and how they are evolving. Understanding the global landscape surrounding tax evasion opportunities in decentralized finance represents a first step at preventing corporate capital flight of cryptocurrencies.
Today, governments levy various forms of taxes on economic activities, including revenue from wages or consumption of goods and services, as well as on properties, in order to obtain the funds necessary to pay their public expenditures and provide public goods and services. As a result, taxes have increasingly become a major source of public funding and a key fiscal weapon used by governments to promote or restrain economic growth and the development of specific economic sectors in many nations today. Block chain is made up of a dispersed database of informational blocks that are encrypted using specialized hashing algorithms to allow data monitoring. The purpose of this study is to look into the effects of using blockchain technology for taxation. In the study, the detailed explanation related to the usage of blockchain technology for taxation was presented. The review's findings support the study's conclusion that the legal and administrative studies are still being conducted to simplify tax administration, enable efficient revenue collection, and lower fiscal deficits. It is also concluded that blockchain has made taxation fast, accurate, and accessible to everyone and is helping in economic development. As a result of its transparency, blockchain technology will cause upheaval and innovation in global tax regimes. In the future work, we will be studying the implementation of blockchain for taxation by proposing an framework and also we will carry out the study to explain the blockchain usage in taxation in real time.
This article discusses the VAT treatment of non-fungible tokens (NFTs) in the European Union. These tokens have been on the market for some time, but their trade volume has grown exponentially recently. Tax authorities have developed some interest in them as a potential new source of revenue, paying attention to their ecosystem and the parties involved. Some tax authorities have already taken a position, while others have remained silent, waiting for market developments. There are still questions to be answered on the VAT implications of NFT supplies, but initial standpoints can be taken. The European Union has already begun to work towards a common position on the VAT treatment of NFT supplies. The difficulty in determining that treatment lies in the fact that the nature of NFTs has not been defined in a harmonized way. This article intends to briefly analyse each of the VAT components contributing to this definition.
Cryptoasset miners verify and record transactions, maintaining the integrity and security of the blockchain network. The Department of Finance ("Finance") has recently proposed new Excise Tax Act (ETA) provisions regarding the goods and services tax (GST)/harmonized sales tax (HST) treatment of crypto mining. Under these proposed provisions, crypto mining activities provided to anonymous recipients will not be subject to GST/HST, but the crypto miners performing these activities will also not be eligible to recover any GST/HST paid on their business inputs (and thus will be forced to bear the brunt of the tax themselves). We believe that Finance's decision to tax what it can identify—the business inputs of Canadian crypto miners—is a roughly balanced but reasonable approach. Although Finance might be legitimately criticized as departing from Canada's decision to eliminate the cascading of tax found in the former origin-based federal sales tax, it seems impossible to administer a destination-based transactional tax such as the GST/HST when faced with "anonymous" recipients (the users of the crypto miner's services). Finance appears to have minimized the cascading of tax by including a carve-out for identifiable recipients of a crypto miner's services, allowing the regular zero-rating rules in the ETA to apply in limited circumstances. In the face of utter uncertainty, Finance's reactive approach is likely the best that it can do. Given the rapid evolution and inherent decentralization of the crypto space, a more broadly based proactive approach would seem imprudent at this time.
Birth of Law No. 1 of 2022 concerning Financial Relations between the Central Government and Regional Governments (HKPD Law) colors a new round of Fiscal Decentralization in Indonesia which in the last two decades has experienced ups and downs. This research is a type of normative research, the approach to be used is the statutory approach and the conceptual approach. Primary and secondary legal materials are collected through a literature study which will then be analyzed in a descriptive-qualitative manner and will later be outlined in the discussion description. The discussion results show that in the two decades of its implementation, fiscal decentralization has positively contributed to national development. However, several studies have also uncovered some negative developments. For this reason, in the context of accelerating development, improving, and responding to the challenges of the times, the HKPD Law was born. The substance of the HKPD Law is very positive in encouraging self-reliance and prosperity, starting from the reform of the tax and user fee system, and regional financing to central-regional synergy. In order to further optimize the HKPD Law, in the future several policy reforms are needed such as optimizing regional own-source revenues through wider tax decentralization, optimal utilization of regional financial loans, and involvement of law enforcement officials in TKDD supervision.
This research considers a new dimension of the effects of the underground sector by examining the spillovers on cryptocurrency holdings. Cryptocurrencies offer a relatively greater ability to dodge taxes and ensure the anonymity of holders, providing attractive avenues for underground operators to stash their informal-sector earnings. Our results, based on data from more than 50 nations, show that a greater prevalence of the underground economy in a nation is indeed associated with greater cryptocurrency holdings. This result holds across an alternative measure of the shadow economy, and when the bi-directional causality between the shadow economy and cryptocurrency holdings is considered. In other noteworthy findings, greater FDI crowded out cryptocurrency holdings, while greater financial globalization and greater economic uncertainty, ceteris paribus, increased them.
The use of private digital assets based on distributed ledger technology and cryptography methods is increasing every year. The opportunities provided by crypto assets due to their special characteristics can be used when issuing digital assets controlled by the state. The subject of this article is the study of digital currencies of central banks (CBDC), the digital ruble, consideration of their differences from cryptocurrencies and the opportunities provided by them to strengthen tax control in the field of compliance with tax legislation by subjects of economic relations. The research was carried out using universal (analysis, generalization) and special legal methods of cognition (comparative legal, historical legal). The novelty of the study consists in updating approaches to identifying the essence of digital currencies of central banks, including the digital ruble and the possibility of their influence on compliance with tax legislation. As a result of the study, the author concluded that the need to introduce digital currencies of central banks is now under active study by the central banks of a large number of states. The advantages for users of these assets will be speed, availability of assets even in regions that are difficult to access for banking services and security from the state. For regulators, the introduction of these assets will reduce interest in cryptocurrencies, transactions with which are often made for illegal purposes, as well as give additional incentives in the fight against tax evasion.
Hamidah Babirye Nsereko, M. Tait, Nadine Oosthuizen
Purpose/Objectives: The purpose of this study was to determine the ideal contract compliance process in Uganda from a state department perspective. Design/Methodology/Approach: In conducting this study, the interpretivist approach using the qualitative methodology was employed. Telephonic interviews and focus group discussions via the Zoom online platform with semi-structured interviews were conducted among 29 procurement officers, heads of finance departments, heads of procurement departments, auditors and accounting officers. The interviews explored matters concerning what is regarded as the ideal contract compliance process. Findings: The findings indicate that the ideal contract compliance involves the following nine stages: understanding the law; procurement planning; requisitioning; establishing funds availability for the items procured; sourcing providers; contract awarding; appointing contract managers; monitoring deliveries; and payment. Practical Implications: Studies such as the current one widen the management scope and suggest that state departments should read the mind of society and continuously engage with them; make SMART plans and budgets; streamline processes; involve technical people; legally assess the contract; and follow the existing laws. Originality/Value: The cost of contract non-compliance is high and could lead to missed deadlines; delays in executing contracts; litigation and even cancellation of contracts. This could result in a lack of transparency and accountability; poor performance; inefficiency; and poor resource usage. To prevent these negative impacts, state departments could add policy recommendations to implement an effective contract compliance process.