“DAOs are a threat to tax collection system”, says Australian senator
Australian Senator Andrew Bragg said on Monday (21) that Decentralized Autonomous Organizations (DAOs) present an “existential threat to the tax system”. For him, these initiatives are recognized as partnerships and, therefore, are not subject to taxation for companies.
Bragg’s speech came during his participation at the Australia Blockchain Week conference, where he announced a broad crypto legislative text called the “Digital Services Act” (or DSA) – or “Digital Services Act” in literal translation.
The senator highlighted DAOs, among other sectors, adding that “they must be recognized and regulated urgently”.
— Senator Andrew Bragg (@ajamesbragg) March 20, 2022
In explaining the reasons behind the proposal, Bragg said that Australia’s “reliance on corporate taxation” is “unsustainable” given that this type of tax accounts for 17.1% of the country’s government revenue between 2020 and 2021.
Basically, a DAO is an online community that leverages standalone contracts to organize part of its governance structure.
These organizations often make use of a native cryptocurrency to incentivize their members and govern decision-making by the community.
The senator also emphasized that it is necessary to recognize “the fact that DAOs are self-regulatory and transparent with a built-in governance system. Legal recognition of DAOs also means that there is a set of “minimum standards” that must be legislated.
These standards, if developed, could provide auditing, assurance, and information disclosure services by DAOs, giving customers the ability to distinguish between retail and wholesale organizations.
The Australian senator urged the Treasury to address these issues while also “clearing the way for DAOs to continue to live up to their name”.
He added that “ten or twenty years from now, we may be talking about the reverse situation: implementing cryptocurrency rules to traditional finance.”
The proposed DAS legislative package also calls for reforms in some areas, such as marketing licensing and crypto custody, while also ensuring that countries such as Russia do not use cryptocurrencies to evade financial sanctions.
The expectation is that by the end of 2022, the Australian government will receive a report on taxes for cryptocurrencies and carry out a token mapping exercise. The government will also assess the potential of DAOs and how they can be incorporated into existing legal and financial frameworks.
With informations: Decrypt