AUSTRALIAN TREASURER SCOTT MORRISON: WE WONT BE TAXING DIGITAL CURRENCIES”

Last updated: June 19, 2025, 20:06 | Written by: Linda Xie

In a move celebrated by the burgeoning fintech sector, former Australian Treasurer Scott Morrison announced a significant policy shift: the government would not be taxing digital currencies. Treasurer Scott Morrison insists anything the Turnbull government does in cutting taxes won't put at risk returning the budget to surplus in 2025This decision, aimed at fostering innovation and attracting investment, represents a crucial step towards embracing the future of finance in Australia.The removal of Goods and Services Tax (GST) on digital currency transactions, often referred to as the ""double taxation"" issue, sought to level the playing field for businesses operating with cryptocurrencies like Bitcoin. We won't be taxing digital currency, said Treasurer Scott Morrison in a statement. Not applying GST to bitcoin and things of that nature, these are the sort of changes thatThis policy aimed to stimulate the digital economy, encouraging wider adoption of digital currencies and paving the way for Australia to become a leader in the fintech space. As reported by the Australian Financial Review, Australian Treasurer Scott Morrison stated: We will ensure access to concessional tax treatments for venture capital investments in fintech firms, will take action to prevent the double taxation of digital currencies we won t be taxing digital currencies.By removing tax barriers and providing a more favorable regulatory environment, the Morrison government hoped to unlock new opportunities for investment, innovation, and economic growth, positioning Australia as a hub for digital currency and blockchain technology.This bold move signaled a clear commitment to embracing technological advancements and supporting the development of a vibrant and competitive digital economy. We will ensure access to concessional tax treatments for venture capital investments in fintech firms, will take action to prevent the double taxation of digital currencies we won t be taxing digital currencies, Treasurer Scott Morrison said on Monday.What does this mean for Australian investors, and what spurred this major policy shift?Let's dive in.

The Rationale Behind Not Taxing Digital Currencies

The decision to forego taxing digital currencies stemmed from a desire to eliminate what was perceived as a significant impediment to the growth of the Australian fintech industry.Before this announcement, Bitcoin and other digital currencies were treated as commodities under Australian tax law, specifically based on a 2015 ruling by the Australian Taxation Office (ATO).This meant that every time a Bitcoin was used to purchase goods or services, it was subject to GST, essentially taxing the digital currency twice – once when it was initially purchased and again when it was used in a transaction.This ""double taxation"" created a substantial disadvantage for businesses and consumers alike.

The rationale behind scrapping the GST on digital currencies was multifaceted:

Boosting Innovation: Removing the tax burden would encourage greater adoption of digital currencies and related technologies.
Attracting Investment: A more favorable tax environment would attract both domestic and international investment in the Australian fintech sector.
Leveling the Playing Field: Eliminating double taxation would create a more competitive environment for businesses operating with digital currencies.
Economic Growth: Wider adoption of digital currencies could lead to increased economic activity and new business opportunities.

Treasurer Scott Morrison emphasized that these changes were designed to ensure Australia remained competitive in the rapidly evolving global digital economy. We won't be taxing digital currency, Morrison said in his remarks. Currently, under a 2025 ruling by the Australian Taxation Office, Bitcoin is treated as a commodity in Australia andHe believed that by creating a more supportive regulatory framework, the government could unlock the potential of digital currencies and drive innovation across various sectors.

Key Components of the Digital Currency Tax Policy

The core of the policy was the removal of the GST on digital currencies, effectively ending the ""double taxation"" issue. Scott Morrison News. News . Australian government s digital business plan includes $5M for blockchain . We Won t be Taxing Digital CurrenciesHowever, the policy also included other important elements designed to support the broader fintech ecosystem.

Venture Capital Investments

The government committed to ensuring access to concessional tax treatments for venture capital investments in fintech firms. In an overtly political budget which Malcolm Turnbull and Scott Morrison hope will revive their fortunes, the government has hit the big banks with a $6.2 billion tax and increased the MedicareThis meant that investors who provided funding to early-stage fintech companies would be eligible for tax breaks, encouraging more investment in this critical sector.

Collaboration with Banks and the ATO

The Australian government committed to working closely with commercial banks and the Australian Taxation Office (ATO) to reform the applied GST law on digital currencies.This collaboration was essential to ensure that the changes were implemented effectively and that the new tax rules were clear and easy to understand for businesses and consumers.

Easing Crowdfunding Restrictions

In addition to the digital currency tax policy, the government also announced changes to ease restrictions on crowdfunding, making it easier for fintech companies to raise capital from a wider range of investors.

Impact on the Australian Fintech Sector

The announcement of the digital currency tax policy had a significant impact on the Australian fintech sector, generating considerable excitement and optimism. To spur the growth of digital currencies and open opportunities for investment, the Australian Government will be working closely with the country s commercial banks and and the Australian Taxation Office to reform the applied GST law on digital currencies in the next few months.Industry leaders praised the government for recognizing the importance of digital currencies and for taking steps to create a more favorable regulatory environment.The policy was expected to have several positive effects:

Increased Investment: The removal of double taxation and the introduction of concessional tax treatments for venture capital investments were expected to attract significant new investment in the Australian fintech sector.
Greater Adoption: The elimination of GST on digital currency transactions would make it more attractive for businesses and consumers to use cryptocurrencies, leading to wider adoption.
Job Creation: The growth of the fintech sector was expected to create new jobs in areas such as software development, blockchain technology, and financial services.
Innovation: A more supportive regulatory environment would encourage innovation and the development of new digital currency applications.

Many experts believed that the policy had the potential to transform Australia into a global hub for fintech innovation, attracting talent and investment from around the world.

The Broader Economic Context

The digital currency tax policy was part of a broader strategy by the Morrison government to stimulate economic growth and promote innovation across various sectors.This strategy included a range of measures, such as:

Tax Cuts: The government was committed to delivering future tax cuts, rewarding people who work hard and providing incentives for businesses to invest and create jobs.
Infrastructure Investment: The government was investing in major infrastructure projects to improve transport links, boost productivity, and create jobs.
Digital Business Plan: The government launched a digital business plan, which included $5 million for blockchain technology and other initiatives to support the growth of the digital economy.

Treasurer Scott Morrison emphasized that the government was taking a different approach to kickstarting the economy, focusing on creating a supportive environment for businesses to grow and innovate, rather than simply relying on interventions such as carbon and mining taxes.

Challenges and Considerations

While the digital currency tax policy was widely welcomed, it also faced some challenges and considerations:

Implementation Complexity

Implementing the changes to the GST law on digital currencies required careful coordination between the government, the ATO, and commercial banks. Despite being able to handle different sales tax in different jurisdictions around the world, Australian Treasurer Scott Morrison has said Amazon's decision to move its Australian users away fromEnsuring that the new rules were clear, consistent, and easy to understand was a complex task.

Regulatory Uncertainty

The regulatory landscape for digital currencies was still evolving, both in Australia and around the world.Changes in regulations could potentially impact the effectiveness of the tax policy and create uncertainty for businesses operating with digital currencies.

Tax Evasion Concerns

Some critics raised concerns that the removal of GST on digital currencies could make it easier for individuals and businesses to evade taxes. TREASURER Scott Morrison says he has no intention of rushing to failure in search of a better tax system. IN a speech to an economic and social reform conference in Melbourne Mr Morrison arguedThe government needed to implement measures to prevent tax evasion and ensure that the new tax rules were not abused.

Global Competition

Australia was not the only country seeking to attract investment in the fintech sector. The Hon Scott Morrison. Treasurer Press office. None available. Footer menu. Treasury; FOIOther countries were also implementing policies to support the growth of digital currencies and blockchain technology.Australia needed to remain competitive in the global market to attract talent and investment.

Comparison with International Approaches

Understanding how other countries approach the taxation of digital currencies provides valuable context. Government pledges to end tampon tax Treasurer Scott Morrison has committed the coalition to exempting women's sanitary items from the GST, three months after Labor pledged the same.Different jurisdictions have adopted various models, each with its own advantages and disadvantages.

United States: The IRS treats cryptocurrency as property, meaning it's subject to capital gains tax when sold or exchanged.
United Kingdom: HMRC treats cryptocurrency differently depending on the specific circumstances, distinguishing between investment and trading activities.
Singapore: Singapore doesn't generally tax capital gains, making it a relatively tax-friendly jurisdiction for cryptocurrency investors.
Japan: Japan considers cryptocurrencies as a form of property and imposes taxes on profits made from their sale or exchange.

The Australian approach, under Treasurer Morrison's guidance, sought to strike a balance between encouraging innovation and ensuring tax compliance.By removing the double taxation issue, Australia aimed to create a more attractive environment for digital currency businesses and investors compared to some other jurisdictions with more complex or burdensome tax regimes.

The Future of Digital Currency Regulation in Australia

The decision to not tax digital currencies marked a significant step forward for the Australian fintech sector. Australian Treasurer Scott Morrison: We Won't be Taxing Digital CurrenciesHowever, it was just one piece of a larger puzzle.The future of digital currency regulation in Australia is likely to involve:

Further Regulatory Clarity: As the digital currency landscape continues to evolve, the government will need to provide further regulatory clarity on issues such as ICOs, DeFi, and NFTs.
Consumer Protection: Ensuring that consumers are protected from fraud and scams in the digital currency market will be a key priority.
Anti-Money Laundering Measures: Implementing effective anti-money laundering (AML) measures to prevent digital currencies from being used for illicit activities will be essential.
International Cooperation: Working with other countries to develop a coordinated approach to digital currency regulation will be important to address cross-border issues such as tax evasion and money laundering.

The government’s ongoing engagement with the fintech industry, commercial banks, and the ATO will be critical to shaping the future of digital currency regulation in Australia.

Scott Morrison’s Legacy and the Digital Economy

While Scott Morrison's tenure as Treasurer and later as Prime Minister has ended, his decision to not tax digital currencies leaves a lasting impact on the Australian economy.This policy signaled a clear intent to foster innovation and embrace technological advancements, setting the stage for further developments in the digital economy.

However, it’s crucial to acknowledge the complexities and ongoing debates surrounding taxation in the digital age.For example, the proposed tax on digital advertising, while separate from the digital currency policy, highlights the challenges of adapting tax systems to new business models.Similarly, the ongoing discussions about multinational corporations and their GST obligations underscore the need for international cooperation to address tax avoidance.

Morrison's move to remove the ""double taxation"" of digital currencies, in retrospect, appears as a forward-thinking initiative aimed at positioning Australia as a competitive player in the global digital landscape.It demonstrates an understanding of the potential of blockchain technology and digital assets to transform industries and create new economic opportunities.

Practical Implications for Individuals and Businesses

The ""no tax on digital currencies"" policy, while aimed at boosting the fintech sector, has practical implications for everyday Australians and businesses.

For Individuals:

Increased Adoption: Lowering transaction costs could encourage more people to use digital currencies for everyday purchases.
Investment Opportunities: A more favorable tax environment could make digital currency investments more attractive.
Potential Risks: It's crucial to remember that digital currencies are volatile assets and involve significant risks.Conduct thorough research and seek professional advice before investing.

For Businesses:

Reduced Costs: Eliminating GST on digital currency transactions can reduce operating costs.
Competitive Advantage: Accepting digital currencies can attract new customers and provide a competitive edge.
Compliance Requirements: Businesses still need to comply with other tax regulations, such as capital gains tax on the sale of digital currencies.

It is essential to stay informed about the evolving tax laws and regulations related to digital currencies and seek professional advice to ensure compliance.

Conclusion: A Bold Step Towards a Digital Future

Treasurer Scott Morrison's decision to declare that Australia will not be taxing digital currencies marked a pivotal moment for the Australian fintech industry.This policy, aimed at eliminating double taxation and fostering innovation, had the potential to unlock significant economic opportunities and position Australia as a global leader in the digital economy.By removing barriers to entry and creating a more supportive regulatory environment, the government hoped to encourage greater adoption of digital currencies, attract investment, and drive innovation across various sectors.While challenges and considerations remained, this bold step signaled a clear commitment to embracing technological advancements and building a vibrant and competitive digital future for Australia.The key takeaways are:

The ""double taxation"" of digital currencies was eliminated.
Concessional tax treatments were provided for venture capital investments in fintech firms.
The government collaborated with banks and the ATO to reform GST laws.
This policy was intended to boost innovation, attract investment, and promote economic growth.

As the digital currency landscape continues to evolve, it is crucial for governments, businesses, and individuals to stay informed and adapt to the changing regulatory environment. The Australian reports Morrison will join former US secretary of state Mike Pompeo and former Trump security adviser Robert O Brien in global strategic and defence firms. He has been appointedWhether or not you agree with every aspect of Scott Morrison's economic policies, his commitment to exploring the potential of digital currencies will likely shape Australia's economy for years to come.Consider consulting a financial advisor to understand how these changes may affect your personal or business finances.