Australia anticipates billions in cryptocurrency tax fines

The Australian Taxation Office (ATO) is attempting to track down and seize the tax evaders and those looking for ways to escape cryptocurrency tax fines, thus expecting to collect billions in the process.

Australia has always had a progressive outlook on cryptocurrency regulations. In 2017, the country legalized cryptocurrency trading and exchange services, safeguarding the interests of the individuals and entrepreneurs involved in the industry.

However, this year, Bitcoin has witnessed an upswing as no other currency has. Thousands of cryptocurrency traders across the globe pocketed millions of dollars worth money as Bitcoin continued to gain strength for the most part of the year. Thus, in an attempt to identify potential tax evaders and scam artists, crypto-friendly countries like Australia are officially beginning their operation hunt down.

Australia shows there’s no escaping cryptocurrency tax

In its active pursuit of uncovering tax evasion activities, the Australian government is collaborating with cryptocurrency exchanges from within and outside the country to gain access to user information, thereby using this data to determine who is it raking in the big bucks while escaping the radar. By doing so, the government is putting the long-standing argument to rest that cryptocurrency transactions are not anonymous, after all, and can be tracked with the help of blockchain forensics and trading platforms.

Will Day, the deputy commissioner of ATO, comments that a huge bulk of data will be collected and matched to identify the lawbreakers. The entire process will ensure that as much as would like to extend our support to cryptocurrency trading, lawbreakers will not be allowed to get away, he adds.

It is estimated that about four percent (4%) of the Australian population owns cryptocurrency, which implies that a million people could be impacted by this operation. 

The entire crackdown process has cost the government over one billion dollars ($1 billion) so far, however, it anticipates that the cryptocurrency fines to traders who have failed to report capital gains, to amount to over three billion dollars ($3 billion).

Depending on the severity of the crime, the traders could face up to five years of prison time, at worst. The government has offered a respite by significantly reducing or even waving off the penalties to people to choose to come clean before the audit.

Meanwhile, Australia is far from being the only country to get tough on tax offenders. Recently, the Internal Revenue Service of the United States took an aggressive stance by sending out collection letters to cryptocurrency investors in the country.

The rigorous clampdown may across as somewhat off-putting for amateurs or beginners, however, it sends out a strong message that as long as you make a clean breast of it, you can reap the benefits of cryptocurrency trading without duress.