Govt's decision to tax crypto is nonsensical and absurd, says Subramanian Swamy

Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2022-2023 announced that all gains on digital assets, including cryptocurrency, will be taxed at 30 per cent. And the government’s decision to tax the crypto has stirred up the debate about the rationality of the decision, mostly among crypto enthusiasts. But former member of Parliament and well-known economist Subramanian Swamy, in an exclusive conversation with Business Today, has said that the imposition of 30 per cent tax on crypto is nonsensical and absurd.

“You [government] first don't recognise it but you say you will tax it, which is absurd. Either you recognise it or you don't recognise it. If you don't recognise it, then go after them, but you say no whatever earnings they make -- which means you allow them to make [those] earnings -- and if you tax the earnings how can you call that illegal anymore?” Swamy said.

According to him, the government’s stance of supporting blockchain technology but being against crypto is just like being in the favour of a car but not for the steering wheel.

“When civilisation began or the human beings started making progress, the first thing was he started with barter trade then over a period of time, this gold coin came, then paper currency came in, but it had a gold backing. Then now we have a paper currency altogether. Now this is going again, back to barter exchange, because the transactions are between the two of us and no money is physically changed. That's our computer age.  It is a computerised version of the old age bartar system,” Swamy pointed out.

Swamy, as a matter of fact, believes that crypto is the future. He further highlighted the pitfalls of having a crypto tax at this stage. According to him, not only does the tax rate act as a disincentive, but can also lead to a flight of talent from the country.

“If you will not allow [crypto] then people will do it in black. And also it will lead to a flight of talent from our country,” Swamy said.