Decentralised autonomous organisations (DAOs) needed to be “recognised and regulated as a matter of urgency”, according to Australian Liberal Senator for NSW, Andrew Bragg.
Speaking at the Australia Blockchain Week conference this week, Bragg said DAOs posed an “existential threat to the tax base” since they are recognised as partnerships and as such are not liable to pay company tax.
Australia Cannot Rely on Company Tax to Raise Revenue
According to Bragg, Australia’s “reliance on company tax is unsustainable” given that it accounted for only 17.1 percent of total federal government revenue in 2020-21.
“DAOs are self-regulating and transparent, with an in-built system for governance,” Bragg said, adding that legal recognition of DAOs also guarantees a set of “minimum standards” that should be legislated. These would give consumers the ability to distinguish between retail and wholesale organisations.
Bragg called for the Australian Treasury to address those issues while also “leaving the field open for DAOs to continue to live up to their name”.
In 10 or 20 years’ time we may well be talking about the inverse situation – applying the rules for cryptocurrency to traditional finance.
Andrew Bragg, NSW Senator
By the end of this year, the Australian government is expected to receive a report on digital asset taxation and undertake a token mapping exercise. It will also examine the potential of DAOs and how they can be incorporated into existing legal and financial frameworks.
Bragg Also Pushes for Policy on NFTs and Blockchain
Earlier this month, Bragg said the country also needed to hear from artists on the best way forward for digital asset regulation. Addressing Sydney’s inaugural 3D art NFT exhibition, Satellite, Bragg said policy specifically relating to NFTs needed to be implemented to stave off a potential “brain drain” on Australia’s arts economy.
Bragg has also urged the Australian blockchain industry to “pick up the pace” or risk falling behind other developed nations, adding that Australia was likely to miss an opportunity to become a world leader in cryptocurrency if the government was not given more power to prioritise digital asset reform.
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