₿ Taxman is looming for the Bitcoin?

by Yash Gohel, Anshumi Shah and Anushka Shah

Hey,


Lawmakers in the United States just found a way to generate revenue. Ah! New tax laws… New Jersey’s Governor Murphy is “very seriously” considering a tax on high volume electronic trading in the state. The idea of taxing these transactions tax is not new. This is because New Jersey is a hot-spot for back-offices due to close proximity to New York City. However, now the government can say, “COVID made me do it!” 


₿ Taxman is looming for the Bitcoin?



South Africa – a country where 13% of internet users juggle with Bitcoin. In fact, it comes among the top three nations where “cryptocurrency” is most searched on Google. But SA crypto traders must soon prepare for stricter taxes.


Do taxes on crypto make sense? Now, for as long as bitcoin can be exchanged or traded with cash and people are benefiting from it, the governments will crave to impose some kind of tax on it.


Cryptocurrencies allow anonymous, frictionless, and trusted peer-peer transactions. To put the cherry on top, its all conducted over the internet. It can be stored on paper or hardware wallets instead of using official services or exchanges. And one can use this as a means of tax avoidance. Moreover, it becomes impossible to confiscate and difficult to track their movements.


Yet another method to confuse trading activities – the ‘smoke and mirror’ tack. Different types of cryptocurrencies can be exchanged for one another and passed through a series of wallets and public key addresses.


South Africa’s revenue service relies on taxpayers’ honesty to include capital gains from trading in Bitcoin. But this might change. All crypto-exchanges might have to share information with the apex department. The same might apply to offshore exchanges, too. Users will not be able to avoid taxes anymore by moving assets out of the country.


Do you think this will create a virtual certainty within the next few years? Will this attract more business and foreign investments. Let’s wait and watch. 



🐦 Scots and their Shooting Properties


It’s no secret that in the tax systems around the world, the middle class gets taxed the most. This week’s piece on Scotland’s shooting properties is no different. 


The Small Business Bonus Scheme (SBBS) of the country says that shooting properties that are valued below £15k could apply for 100% tax relief. However, it has faced harsh criticism because 90% of Scotland’s shooting properties, many owned by billionaires, are exempt from paying £10.5m in annual business rates! The opposition strongly believes that this makes billionaire owners of shooting estates exempt from the tax. Scottish Labour favored this criticism saying the wealthy landowners should not be “subsidized from the public purse when they can afford to sustain themselves”.


Justifying this relief, the lawmakers said that small farmers and crofters had suffered due to tax aimed at a small number of the super-rich. The Scottish Government also said that it will deliver fair and sustainable rates for all businesses and that this Scheme will be independently reevaluated. 


Will end up with the relief this time? Or will it still be the rich who legally escape paying taxes?



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📉 UK’s Deficit of Eleven Trailing Zeroes….



British finance minister Rishi Sunak launched a stimulus package for COVID-19 recovery. The government proposed several initiatives such as a job retention scheme and a dine-out subsidy. As a result of this emergency spending, the public debt in Britain passed $2.7 trillion dollars. In case you needed a visual it’s  $27,00,00,00,00,000.


So, how do they plan to clean this mess? Well, Tax Hikes it is. Sunak’s plan is to boost the corporate tax from 19% to 24% (to raise 12 billion pounds next year) and increase the capital gains tax from 28% to 40%. We are not done yet. They are also considering a tax for online retailers, lesser pension tax relief, and fuel duty. Here is the other side of the coin. Prime Minister Boris Johnson’s officials are strongly resisting this tax increase. 


Should the UK government focus more on decreasing expenditure rather than increasing taxes?



㊙️ History Repeats Itself for Japan


You’d assume that people learn from their mistakes. We guess not. In 2014, the Japanese government increased the sales tax from 5% to 8%, which knocked the economy off course. A similar chain of events took place in the year 1997. Once again the Japanese government decided to raise the sales tax from 8% to 10% during the pandemic. And this has pushed the economy into recession. 


What now? The lawmakers have proposed to slash the sales tax. The revenue from the sales tax was supposed to fund social welfare costs. Instead, it has caused intense damage to the third-largest economy of the world. There is a debate revolving around eliminating Japan’s 10% sales tax and preparing a $282 billion supplementary budget.



🧐 Sneaky meets Sneakier


The Trump Administration is back with a stunt! This time around they issued a new 25% tax on a wide range of European products coming from Germany. And Camera Lens is one of them!


Leica Camera, a manufacturer of digital cameras from Germany is not willing to risk this price hike. They started manufacturing lenses in their Portugal facility. However, their German factory continues to produce most of the optics. Their new loophole line is called ‘Made in Portugal’.


Where there is a will, there is a way!



🛸 A trade-tax dispute ignited the lethally violent saga called ‘Star Wars!’ – Crazy tax Story



A group of bureaucrats is unaware that they’re being manipulated to fuel trade war in the universe. Let’s go back to ‘The First Crawl’ at the beginning of “The Phantom Menace.” Yes, it’s the fourth “Star Wars” film, released 22 years after the series’ 1977 debut. It’s still Episode 1.


“A long time ago in a galaxy far, far away, turmoil has engulfed the Galactic Republic. The taxation of trade routes to outlying star systems is in dispute. Hoping to resolve the matter with a blockade of deadly battleships, the greedy Trade Federation has stopped all shipping to the small planet of Naboo. While the Congress of the Republic endlessly debates this alarming chain of events, the supreme chancellor has secretly dispatched two Jedi Knights, the guardians of peace and justice in the galaxy, to settle the conflict.”


Taxes are used for plenty of purposes. But to start an intergalactic war…seriously?


Maybe the Trade Federation, Empire, First Order, or whatever the baddies call themselves could have ended this dispute by working the system and seeking exemptions. Instead, they chose extreme military interventions. Well, the real reason was to propel the career of a certain senator…


So, if it weren’t for a tax dispute, Episode I would have never happened, and we could have avoided Jar Jar Binks.


Beard Tax…alright? Window Tax…maybe! Fat Tax…it’s for the better. Bachelor Tax…never felt more alone. But ‘Murder Tax?’ (fictional but catastrophic) The planet of Tatooine, the home of Luke Skywalker had an excessive murder rate. And that’s the inspiration behind the Jabba and Hutt to impose a murder tax.


By the way, the entire sale of the Star Wars franchise to Disney (for a whopping USD 4.05b) had a tax-related timing decision, too.


P.s: Couldn’t wait till Star Wars Day (May 4th) to share this with everyone



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