In a recent development, New Zealand’s Inland Revenue Department (IRD) has intensified its scrutiny on crypto traders who have sidestepped declaring their earnings. On Thursday, the IRD announced that it is homing in on individuals who have not included their crypto transaction profits in their tax returns.
**Shalini Nagarajan**
*Last updated: July 4, 2024, 00:27 EDT | 1 min read*
The tax watchdog has pinpointed approximately **227,000 cryptocurrency participants** engaging in close to **7 million trades**, with a cumulative value of **NZ $7.8 billion (USD $4.7 billion)**. Since 2018, the IRD has treated digital currencies akin to property, implying that gains from crypto purchases, sales, or trades are taxable.
**IRD Issues Crypto Taxation Alert**
The IRD’s spokesperson, Trevor Jeffries, revealed that after an initial alert to crypto traders in late 2020, the department is issuing a fresh batch of notices. “Our data has been instrumental in identifying non-compliant taxpayers,” Jeffries stated. “This information is also being leveraged to pinpoint holders of substantial crypto assets.”
He urged individuals profiting from cryptocurrencies to consider their tax responsibilities and the perils of concealing taxable activities. Jeffries highlighted the IRD’s commitment to educating the public on crypto taxation and dispelled myths regarding blockchain anonymity, noting the department’s capability to trace and scrutinize crypto dealings, thereby curbing tax evasion.
**Rising Interest in Digital Currencies in New Zealand**
The island nation is witnessing a burgeoning interest in cryptocurrencies, with an unprecedented number of Kiwis now holding digital assets. A recent survey indicates that this uptick is partly fueled by skepticism towards traditional financial institutions, which some view as impediments to their economic aspirations.
The survey, encompassing over 1,000 individuals, found that 14% currently possess or have previously held cryptocurrencies, marking an increase from 10% in 2022. Furthermore, nearly half of the respondents (45%) are contemplating crypto investments in the future.
In a call to action, New Zealand’s Commerce Minister, Andrew Bayly, urged the government in April to bolster the crypto sector. He voiced concerns over the sluggish uptake of digital currencies and advocated for updated regulations to nurture the industry’s expansion.
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