OECD statement are part of its larger initiatives to help countries fight tax evasion. It says cryptocurrencies need checking to not undo the progresses made in fighting tax evasion, globally.
Organization for Economic Cooperation and Development (OECD) says governments need to do some more work to harness opportunities presented by blockchain technology and cryptocurrencies. Meanwhile ensuring that the tax system is efficient.
OECD’s Secretary-General Angel Gurría wrote to G20 finance ministers and central bank governors. Since there are both opportunities and challenges (risks) of the rise of blockchain technology and cryptocurrencies.
The report says that cryptocurrencies need checking in order to not undo the deeds of tackling offshore tax evasion progressed in the last decade. Thus, governments will need to do an analysis of the imminent risks and adopt possible solutions.
OECD propose solutions such as information sharing and reporting and well as enabling tax authorities to do so.
The statements echo OECD’s much larger Inclusive Framework on Base Erosion and Profit Shifting (BEPS). Initiatively that aims to help countries address tax evasion.
Additionally, the statement echos another letter by the Financial Stability Board that told G-20. It says that cryptocurrencies and blockchain have advantages as well as risks.
However, the Financial Stability Board said cryptocurrencies do not pose a global risk to global financial stability given its value in global GDP.
Additionally, OECD will study the consequences of taxing cryptocurrencies and blockchain technology through its Forum on Tax Administration arm.