Colombia’s government wants crypto holders to declare their holdings. However, industry figures say this will only force crypto enthusiasts and their coins onto overseas platforms.
Criptonoticias reported Lisandro Junco Ribera, Director of the Colombian tax office (known locally under the DIAN), had proposed the establishment of “retroactive sanction” to boost government coffers up to USD 8m and force crypto-owners to give up a portion of the profits they earned from trading and staking.
Junco Riveira, a crypto communicator, told Blu Radio that it was now time to pay taxes on crypto-related earnings.
The Director stated that anyone who has made investments in cryptoassets must now declare them to the Colombian Treasury along with any other assets. According to the report, customers of crypto-exchanges such as peer-to-peer trading platforms such as LocalBitcoins have been warned by the tax agency that they must declare their holdings in order to avoid being subject to punitive measures.
The retroactive nature means that investors and crypto traders’ historical activities will be subject to taxation, which could mean that trades as far back 2016 could be subject to taxation. Experts warn that this could be a problem for crypto enthusiasts in Colombia.
MauricioTovar, co-founder of Tropycus Financing, stated in an interview with Enter.co that the move could prove to be self-destructive. Tovar reportedly stated
“Many people wish to pay taxes and declare them. It seems [naive] to me that a guide issued a week ago will seek out to sanction people’s activities from six years ago.”
Tovar stated that this regulatory activity would eventually “scare” wealthy investors with significant capital in cryptoassets away from Colombia. He suggested that they would rather “simply” move their investments to countries with more favorable regulations.
Tropycus Finance chief said that fair tax payment systems could benefit both DIAN and crypto sectors, which are also in search of legitimacy. He concluded:
People respond to incentives. To make things happen, the government should create positive incentives.