IMF eyes tens of billions in crypto asset taxes, has few suggestions for collecting them

Taxing Crypto Today

Governments have yet to address all the ways crypto might be taxed, the International Monetary Fund (IMF) has realized, and the amount of taxes not imposed or collected may reach well into the tens of billions of dollars. That insight does little to reduce the variety of challenges to taxing crypto currency, however.

Crypto’s “semi-anonymity,” its dual nature as an investment vehicle and a means of payment, and its high volatility complicates the task of tax collectors beyond their current abilities, according to a new IMF working paper. There is no consensus yet even on how to tax cryptocurrency— as income, capital gains (which is most common) or gambling, and it doesn’t help that tax systems were designed before the emergence of blockchain technology, which has spun out a range of assets that needs separate treatment.

The paper noted that crypto is not an especially effective means for tax evasion due to its high fees and volatility. However, if the potential for crypto tax collection could be harnessed, “corrective” taxation could help offset the undesired influence of crypto currency on macroeconomic factors, as well as further ecology goals. The paper noted that green taxation is being explored, but more mechanisms must be considered.

The paper cited research monitoring crypto transactions relative to statements by tax authorities in the United States. It showed that the market does respond to tax authorities’ guidance, sometimes indicating new attempts at evasion.

Crypto Tax Compliance

Despite the “vast amounts of data in principle available on transactions in cryptocurrencies,” the International Monetary Fund (IMF) has noted that there is “relatively little analytical work or empirical evidence” to draw on. This is compounded by the fact that crypto is popular in emerging economies, where collection technology may be limited. Moreover, the crypto market is divided between whales and small holders, which may necessitate separate treatment.

The IMF suggests that proper tax design is essential, and that a flat-rate tax could be imposed on anonymous transactions. The challenge lies in the technology rather than anonymity. Centralized exchanges, such as and Voyager Crypto, could present more opportunities to police for tax compliance than decentralized exchanges, although the necessary work would have to be done to implement it. Mandatory Anti-Money Laundering/Know Your Customer measures would not be sufficient for tax reporting purposes.

One way to promote tax compliance is to impose greater reporting requirements on crypto miners, according to the IMF. Sales and value-added taxation (VAT) for crypto, such as crypto today,, voyager crypto, and crypto currency, have been largely overlooked and are a complex web of inconsistencies.

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