You need nothing less than ‘a miracle’ to succeed with an initial coin offering (ICO) in Australia, a local market leader told the government this week.
During a hearing of the Select Committee on Financial Technology and Regulatory Technology on February. 20, Dr. Jemma Green said her blockchain business had succeeded despite, not thanks to, government policies.
Dr. Green is the executive chairman and co-founder of the Australian blockchain energy company Power Ledger, which develops blockchain-based software for decentralized energy trading. ZDnet reported its comments on the day of the hearing.
Dr. Green appeared before the committee in her capacity as a fellow of blockchain Australia, the domestic blockchain industry body. Earlier this year, Blockchain Australia and RMIT Blockchain Innovation Hub from RMIT University published a report with detailed recommendations for taxing ICOs.
Based on this research, Dr. Green argued that current policies have a negative impact on local ICOs by classifying their revenues as revenues, in accordance with existing tax guidelines. She stated:
“Many countries – for example Switzerland – change it to place them on capital accounts, which moves the tax point to when revenue is used to build a platform that generates revenue. In Australia, revenues are taxed as income, and as a result, Australia is not an attractive proposition to undertake one of these ICOs. “
Blockchain Australia argued for a policy that would apply the same treatment to ICOs as that offered to companies from a traditional capital increase. This would then apply to all projects, including the early offers that started in 2017.
Dr. Green pointed to the findings of the report that, although $ 26 billion has been raised worldwide through ICOs, Australia has captured only 0.79% of this market.
According to her, Power Ledger, which has been expanded to nine countries, owes little to the success of the government. Dr. Green went so far as to claim that:
“It’s really a kind of miracle that we exist in the first place, but there could be many of these miracles if we make the ICO tax scheme suitable for the purpose.”
Reviewing the system could also bring benefits for tax revenues, she claimed, allowing the government to receive the “premium” when such businesses become profitable.
Dr. Green pointed out challenges for the Australian industry that go beyond tax issues. She wrote:
“Education will play an important role in achieving real, progressive change in Australia. We cannot expect policymakers to embrace emerging technology and a new system that they fundamentally do not understand. “
As previously reported, the Australian Securities and Investment Commission renewed its ICO and cryptocurrency trading framework last year. His intervention, however, in particular did not include an update of the tax and consumer protection policy, for which it referred industry participants to existing approaches as determined by other regulators.