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New Zealand Tax Authority IRD asks crypto firms to hand over user info

Photo of: Dennis Ramos
by Dennis Ramos

The New Zealand tax collecting agencies are circling back to the good-old tax-based economics to collect revenues. Now that crypto earnings come under the tax net, it is also seeking to round up those in the crypto trading business to pay up for their earnings. The New Zealand tax agency has demanded from all the cryptocurrency firms in the country, divulge the details of its customers which include their personal detail and cryptocurrency asset value. 

The Inland Revenue Department is officially the Tax vigilance agency of New Zealand and it has communicated for the information. In a statement so issued to Radio New Zealand, the agency has requested the information so that it is able to understand the current scenario of the industry in the country. Not only that based on its observations it will also be able to guide the taxpayers to meet their income tax obligations. The move by IRD comes at a time when nations around the world are fencing perimeters around the cryptocurrency market. Tax regulators all around the world are tightening their grip just to ensure that everything goes as per protocol.

A few weeks ago in the last month of August, it was also reported that the US Internal Revenue Service had sent a bundle of letters to some suspected crypto holders about whether they had correctly reported transactions or not. CoinTracker.io offering services for crypto-based tax preparation said that it came to their attention that the IRS had started sending out cryptocurrency tax warning letters to US-based crypto users. The IRS also had a crypto tax summit providing the window of opportunity to the entities in the business to learn what they should be in terms of the tax net. 

Following the announcement made by IRD, Chief executive of Easy Crypto, Janine Grainger, said she was disappointed and had a lot to talk about it

“I guess [IRD] is just widening its net of the tax base and crypto assets are something that is definitely growing in popularity and we’re seeing a huge increase in New Zealanders getting involved. Privacy is really important to us… one of the tenets [of] cryptocurrency, in general, is around having freedom and autonomy and privacy. While many people might think ‘I have nothing to hide, therefore, what do I care?’ the point of privacy isn’t to aid people who have something to hide, it’s to ensure we have a fair, open and free society.”

She believes that the decision to seek such information and to expand their tax base is ‘heart-breaking’. The firm also will concur with everything that is required to do under the law. IRD clarifies that the entire scheme has been planned so that it can understand what fine distinctions of meanings. It is still in the early stages of its inquiry and it will be early to say what the response has been among the different firms. It also said that if the individual taxpayers are concerned if they have not met their obligations they can voluntarily do so. 

A new set of guidelines were also issued on how crypto assets would be taxed.