With the advance of global technology, tax authorities are conducting researches on new and efficient ways to identify, levy and collect tax revenues from their citizens and businesses.
The latest innovative option identified by some states for paying taxes is the use of digital or virtual currencies, such as Bitcoin.
In the United States of America, on November 26, 2018, Ohio, became the first state to accept payment of taxes using the digital currencies particularly, Bitcoin.
In Switzerland, Zug became the first city to embrace Bitcoin in 2016, as a mode of paying certain services including public utilities.
Recently, on January 28, 2020, Zermatt became the second municipality in Switzerland that permitted its citizens the opportunity to pay their tax obligations and other government services using the cryptocurrency.
Through a financial service intermediary called Bitcoin Suisse, the authorities of Zermatt will receive the tax payment in Bitcoin through an online payment platform or point of sale device, convert it into Swiss francs and then transfer the amount in fiat currency to the municipality government.
While some countries are quick to embrace the use of Bitcoin as a mode of paying services, other countries are drifting away from it and would rather adopt a ‘wait and see’ attitude as they believed that, Bitcoin price is very volatile in nature and hence very risky.
For instance, on Jan 8, 2020, the lawmakers of the New Hampshire state withdrew a bill that would have permitted local state agencies to accept cryptocurrency as an option for tax payment. They retracted the bill inter alia, on grounds of the price volatility of Bitcoin.
In Ghana, there is no existing regulatory framework for trading and investing in virtual currencies, popularly called cryptocurrency. Though the Bank of Ghana and the Security and Exchange Commission are cogitating about the regulation of these digital assets, such laws and legislations are yet to be rolled out to regulate the ‘’use, holding, and trading of virtual currencies’’ especially, Bitcoin in Ghana.
Until this legal and regulatory framework is established, the government through the Ghana Revenue Authority cannot adopt Bitcoin as an alternative for payment of taxes by individuals and businesses
The author is a Financial Analyst and a Lecturer