Indian Crypto Group Sounds Alarm on High Taxes
One of the major issues that the crypto industry constantly has to deal with is taxes. From the lack of crypto-related tax codes in some parts of the world to the sometimes stringent requirements put on crypto firms, tax is a hot-button issue.
In India, a group called the Bharat Web3 Association (BWA) which advocates for the industry, is bringing more attention to the issue of high crypto taxes. This is being done as part of recommendations to be submitted to the Indian Finance Ministry as it decides on its budget for next year.
Death and Crypto Taxes
It should be noted that the BWA is made up of some very big names in crypto, including Coinbase and Polygon. Given the size of these companies and how big the Indian crypto market is, they are incentivized to have this tax issue resolved.
The BWA has been putting a lot of effort into securing better tax codes for crypto companies in India recently. Not only are these recommendations being submitted but a meeting will also be held between the association and representatives from the Central Board of Direct Taxes (CBDT).
But what is it about these tax codes that are so bad? In the last year, the Indian government instituted a 30% capital gains tax as well as a 1% transaction tax deduction at source on crypto transactions. Obviously, these are quite high and many within the industry have complained about them being unfair and eating into their profits. And the BWA wants to hopefully have this changed through its upcoming meeting.
This is in light of not only the tax rates themselves but the fact that the industry is going through a slump. Even in the best of times, such rates would be hard to keep up with but are even worse in a bear market.
“The BWA aims to highlight the impact of the existing tax provisions such as TDS, tax on income from VDAs, and not allowing carrying forward of losses on the wider industry and share its inputs on suitable amendments which can help address the concerns of the government and at the same time allow growth of this sector,” a representative for the association told the press.
But that is not all on the agenda. While the association wants the government to implement more favourable crypto tax laws, it is also seeking better regulation. This, of course, is in light of the collapse of FTX, a Bahamas-based crypto exchange that saw billions in customer funds lost and a ripple effect throughout the industry that has seen several companies fall into dire straits.
As the BWA puts it, this sort of incident can be prevented in the future if better regulations are put in place.
The Place of Laws
All the activities of the BWA simply show the importance of crypto advocacy and associations that pursue the best interest of the industry. Should their requests be met, it will lead to a better outcome for the industry overall.