Jack Dorsey calls for abolishing taxes on Bitcoin payments
Jack Dorsey called on US authorities to lift the tax on small Bitcoin transactions to make the world's leading cryptocurrency more convenient for everyday payments. The founder of payments company Square made this statement after his company integrated Bitcoin payment services for merchants.
“We want Bitcoin to become mainstream money as soon as possible,” Dorsey wrote on Wednesday. Square added Bitcoin acceptance to its online payment systems and point-of-sale terminals.
Dorsey's statement caught the attention of Wyoming Senator Cynthia Lummis. In July, she introduced a cryptocurrency tax bill that would exempt Bitcoin transactions up to $300 from capital gains tax. The annual cap on such exempt transactions would be $5,000.
Under current US law, any Bitcoin transaction is subject to capital gains tax. The holder must pay the tax if the Bitcoin price has increased since the purchase. This significantly limits the use of the world's first cryptocurrency as a means of payment.
Bitcoin proponents continue to push for tax breaks for small transactions. They want to encourage the use of the digital currency as a peer-to-peer payment system, as described by Bitcoin creator Satoshi Nakamoto in his whitepaper. At the same time, the cryptocurrency must retain its store of value function.
The industry requires change
In October, the US Senate Finance Committee held a hearing on cryptocurrency tax regulations amid the government shutdown. Lawrence Zlatkin, vice president of taxation at crypto exchange Coinbase, asked senators to enshrine in law a tax break for cryptocurrency transactions up to $300.
Zlatkin believes such a measure will spur cryptocurrency payments in retail and ensure the development of payment innovations in the US, rather than abroad.
Several jurisdictions are already implementing favorable tax regimes for digital assets to attract investment, including the United Arab Emirates, Germany, and Portugal.
Preferential taxation in other countries makes them attractive to cryptocurrency companies and funds, which open offices there, putting the US at a disadvantage compared to more advanced countries.
The issue of taxation of cryptocurrency payments is becoming increasingly relevant as large companies begin to integrate Bitcoin into their payment systems.
Source: cryptonews.net
