Reasons Why Tax on Cryptocurrencies is not possible?

[Yugocean]

Governments of the world and revenue/tax experts are doing their best to implement tax on cryptocurrencies, but no matter what they do, there is always loopholes and out of the reach and even political authority due to human rights.

1) Undetermined Value :- Value of cryptocurrency is not fixed due to decentralized world market, one government or some Governments cannot fix any value for any cryptocurrency. Due to this, nobody is able to make a decision if it comes under taxable earning or not.

2) Government Treasure :- Neither any government have a crypto based treasury to collect tax on crypto, nor any government is going to create government wallets from other sources; governments need their own sources, and different wallet for different blockchains & different digital assets is a very hard way.

3) Crypto :- Even if a government impose a tax on any basis of crypto, they will find crypto itself is not a currency, it is not possible for any government to force people to sell the crypto and bring taxable money, this will violate many rights of citizen/subject.

4) Value change :- As pointed in para (1) above, if a tax is collected in crypto, just next value may drop and people move to other coins/tokens this will result in loss for government, however, if value of the crypto rise, then people will ask refund of rest of the amount; this will only give extra headache to government.

 

[Josemendez]

) Undetermined Value :- Value of cryptocurrency is not fixed due to decentralized world market, one government or some Governments cannot fix any value for any cryptocurrency. Due to this, nobody is able to make a decision if it comes under taxable earning or not.

Actually they do not need to set a value for any cryptocurrency neither does cryptocurrency need to have a fixed value . All that they can do is to give a fixed amount. For example , I read online about the US new law to collect tax on any cryptocurrency transaction above $5000.
Laws like this , will still hold despite the volatile nature of cryptocurrency ,as the law is on the amount and not on the price of the coin.
Secondly , this is to help the Governments have something in return , as such a huge amount in the fiat world normally attract taxation , the cryptocurrency world shouldn't be an exception , otherwise everyone will run to cryptocurrency to avoid taxation on huge business transaction.

 

[Yugocean]

I read online about the US new law to collect tax on any cryptocurrency transaction above $5000.

Well

as the law is on the amount and not on the price of the coin.

Just in above para you said "price of the coin" ($5000)

I never said people should not help government in revenue.
One point is government can tax when you convert your crypto to fiat, there value etc everything is worth understanding, but till you keep it in crypto, government cannot tax it.

For example - Imagine you have 1 BTC, now how will you pay tax? Do your government have BTC wallet?
"Tax on Cryptocurrencies is not possible" The only way is to convert your BTC into fiat to pay tax.