When it comes to taxes placed on crypto activities, many governments remain unsure of the appropriate action to take. This has led to people declaring their taxes incorrectly and worrying about possible repercussions. Most tax return guide booklets don’t explain how to declare cryptocurrency hodlings, but a few countries are starting to clear this grey area up. Last week, Poland passed a new bill that details how cryptocurrency hodlings should be declared, and it’s legislation like this that will pioneer global crypto tax laws.
Interestingly, the biggest advances in crypto adoption and regulation often appear in the unlikeliest of places. Ivan Duque – President of Colombia – has announced that the country will slash the taxes paid on rent for cryptocurrency and blockchain firms.
Blockchain’s South American Hero
Ivan Duque only took up office in August 2018 and he is already planning to revolutionize the blockchain industry in Colombia. He has a strong financial background, previously working with the Ministry of Finance and an Inter-American Development Bank. Thanks to this experience and knowledge, he is open to new ideas and technology as a means to improve the lives of his country’s people. Having a crypto and blockchain friendly president certainly makes passing new crypto-friendly bills a lot easier – a large number of the Colombian senate are also friendly towards crypto. This combination will help Colombia become a South American hub for blockchain development and crypto adoption.
Helping Companies Open Up
Duque has suggested that the government will slash the taxes on the rental of offices for crypto related firms. This cost saving measure is designed to encourage new blockchain and crypto companies to move to Colombia and open offices. The proposed measures have been touted to last for up to five years, with a view to extend this if it creates a certain amount of new jobs in the country.
Reduction of Corruption
Unfortunately, Colombia is still reeling from the corruption brought about by the Escobar years. However, Duque is planning to use blockchain to rid the country of this corruption and he is also considering a range of other uses to help better the lives of Colombia’s citizens. Just one of these ideas is using blockchain to store medical records and make the healthcare system more efficient. Companies are already looking into possible blockchain solutions for the healthcare industry, with there already being a strong case for the pharmaceutical industry to be on a blockchain.
South America Dabbling in Crypto
Colombia won’t be the first country in South America to begin dabbling in crypto related regulations. In fact, Venezuela already has its own government-backed cryptocurrency – the Petro – and most stores in the country accept some form of crypto as a payment method. This is due to hyperinflation and desperation from the citizens, but Venezuela is proving that cryptos have a real-world application and can be an incredible lifeline in times of economic crisis.
While the proposal still has a long way to go before it becomes a reality, it is an encouraging statement from the president. Once Colombia has implemented its first crypto related bills, more will likely follow, so the country could eventually emerge as a South American blockchain power.