The Australian Department of the Treasury is claiming bitcoin and digital currencies are a potential threat to its tax collection efforts.
In a new report, the government agency outlines areas in which it hopes to change the structure of its tax revenue system, citing the emergence of new financial technologies, including bitcoin and other digital currencies, as challenges it has yet to adapt to.
The report notes:
“New ways of transacting, including cryptocurrencies such as bitcoin, were not contemplated when the current tax system was designed.”
The specific risks, the paper continued, involve the ability of entities to shift or obscure liabilities to achieve a more favorable rate by hiding the existence of assets from tax authorities. The report does not elaborate on how the utilization of bitcoin to avoid tax liabilities might be prevented.
The study suggests that the Australian government is seeking ways to at least stunt the trend among multinational corporations that use opaque legal strategies to lower their tax liabilities.