You may not know it, but Singapore has a budding cryptocurrency sector. In fact, the wealthy city-state has gone as far as to invest in Binance through its sovereign wealth fund, back blockchain incubator and media outlet Longhash, and propose a specific tax exemption for digital assets.
Singapore, a Crypto Hub
Singapore recently proposed somewhat of an industry-first tax cut. The local government suggested that it should exempt digital assets focused on being a medium of exchange (Bitcoin, Ethereum, Litecoin, Dash, Monero, XRP, and ZCash were given as examples) from a sales tax, only when they are used to pay for good or services. Should the proposal from the Inland Revenue Authority of Singapore pass, no longer will citizens be mandated to pay 7% worth of goods and services tax as they make such transactions.
According to Gwenda Ho, a partner at PricewaterhouseCoopers (PWC), this will help to boost Singapore’s budding crypto economy, by giving entrepreneurs in the area more of a financial incentive to foray into the blockchain and crypto asset solutions market. Addressing ICOs in particular, she stated:
In the past, when Singapore entities issued tokens through an initial coin offering, because the issuers did not want to incur extra compliance costs [through the GST], they would usually exclude Singaporean participants,
Those involved in the crypto industry suggest that this will level the playing field between digital assets and fiat money, just like Australia, Japan, and other forward-thinking nations have done over recent years.
As aforementioned, this isn’t the city state’s first rodeo, so to speak, with the Bitcoin bulls. The nation previously saw Ravi Menon of the Monetary Authority of Singapore claim that the local government is doing its best to connect “banks and cryptocurrency fintech startups” to see if a common footing can be reached.
IRS Doesn’t Take Hints From Singapore
On the other end of the spectrum, the Internal Revenue Service (IRS) in the U.S. has begun a brigade against crypto investors under its jurisdiction. Dozens of American users of Coinbase recently posted images of a letter from the IRS online, which tacitly accused the receivers of not properly filing their cryptocurrency-related taxes. Many have deemed this a clear “scare” tactic.
This seems to be part of the IRS’s attempts to ramp up its efforts against the industry, as an over 100-part slide deck recently leaked about the tax authority’s plans to ensure that Bitcoin and other digital assets aren’t used to evade taxes.
Photo by Will Truettner on Unsplash