Australian Treasury: Digital currencies a risk to tax collection

In a latest report, the Australian Department of the Treasury has said that bitcoin and digital currencies pose a threat to its tax collection efforts.

The treasury pointed out the areas in which it hopes to transform the structure of its tax revenue system, citing the surfacing of new financial technologies, including bitcoin and other cryptocurrencies, as challenges it has yet to adapt to.

"New ways of transacting, including cryptocurrencies such as bitcoin, were not contemplated when the current tax system was designed", the report said.

The major risks, in particular, include the ability of entities to transfer or obscure liabilities to get a more favorable rate by concealing the actual value of assets from tax authorities.

The report suggests that the Australian government is looking for ways to keep a check on the trend among multinational corporations that use opaque legal strategies to reduce their tax liabilities.