An Indian parliament member says crypto is like gambling and must be taxed at a very high rate, such as 50%. “We need to discourage and disincentivize” trading and investing in the asset class, he stressed.
Indian Member of Parliament Wants to Tax Crypto at 50%
Indian Member of Parliament Sushil Kumar Modi shared his views on cryptocurrency in an interview with Forkast, published on Tuesday. Modi is a member of Rajya Sabha, the upper house of the Indian parliament.
He recently made headlines when he urged the Indian government to impose more than 30% tax on crypto income prior to Rajya Sabha passing Finance Bill 2022. He told the publication that the Indian government should tax crypto income as much as 50%.
Modi explained:
The government hasn’t said in so few words… that crypto is like gambling. It’s like the lottery, it’s like a casino, it’s like horse racing… and in all these things, the tax rates are very high.
Besides wanting to tax crypto income at 50%, Modi also suggested levying 28% goods and services tax (GST) on the entire crypto transaction value, instead of only applying 18% GST on the service provided by crypto exchanges. “Like gambling, horse racing, casino, lottery, the GST should be on the entire transaction value,” he opined.
The MP then compared crypto to traditional investments. Stating that stocks have companies behind them, “no one knows who is behind these cryptos,” he pointed out. “We must discourage and discourage” trade and investment in the asset class, the lawmaker stressed.
He explained that the Indian government is working on crypto legislation and needs to decide in the near future whether crypto is an asset, a commodity, a stock, a good, or a service. The parliament member noted that it is important for the Indian government to discuss crypto legislation with the International Monetary Fund (IMF) and the World Bank, elaborating:
The Government of India should not be in a hurry and should submit a consultation document.
While clarifying that crypto assets can be regulated, Modi dismissed the possibility that the Indian government will adopt bitcoin as legal tender. He detailed:
One thing is very clear, the Indian government is not going to legalize (crypto) like El Salvador or Ukraine. It will not be treated as legal or fiat currency.
“We feel these cryptos are not good for the financial stability of any country … Only countries with unstable finances are legalizing these tenders,” he opined. El Salvador adopted bitcoin as legal tender in September last year. Ukraine’s president signed the law “On Virtual Assets” last month after the invasion by Russia.
Commenting on the subject of online gambling and India’s multi-billion dollar fantasy gaming industry, Modi said, “A low-income country like India should not encourage such activities too much.”
The Rajya Sabha member expects to see strict regulations for cryptocurrency in India. He warned: “The government wants to make life hell for those people who are investing in cryptos. That is the bottom line. That is the main thrust of the entire tax.”
