- Australian crypto accounting and tax advisory firm Kova Tax has received a grant to flesh out its online tax platform
- This is the first time a grant has been awarded to a crypto tax accounting firm in Australia
Australia has awarded a government grant to a Brisbane-based company to build its tax filing software as the nation seeks to close the gap on unclaimed cryptocurrency tax receipts.
The second round of the Boosting Female Founders Initiative awarded crypto accounting and tax advisory firm Kova Tax’s Syla platform $387,550 (US$277,929) in grants, according to a statement on Tuesday.
The initiative targets women entrepreneurs looking to access funding for startup growth. Syla was announced as one of 38 grantees to receive the grant from a pool of more than 2,500 applicants for total funding of $12 million (US$8.6 million).
Minister of Women’s Economic Security Hon. Jane Hume and the Hon. MP Angus Taylor said on Tuesday the initiative aims to promote female-led startups and help Australia’s economic recovery.
“These startups demonstrate the incredible Australian ingenuity that we want to encourage across the country,” Taylor said.
The cloud-based tax reporting and portfolio management software uses a proprietary AI-based engine to automate crypto tax reporting, similar to how Koinly and CoinTracker work.
This is the first time a government grant has been awarded to a company for the development of such software and signals a change in the country’s tax and regulatory landscape.
“It is difficult for accountants to process all crypto transactions and achieve correct tax results for their clients due to the volume and complexity of transactions and also the lack of guidance from the Australian Tax Authority,” said Maryna Kovalenko, director of Kova Tax, told Blockworks.
“Investors want to know that they are paying the least amount of tax possible and to be sure that they are not at risk of being audited.”
The web-based platform, designed by tax professionals, allows traders to manage their crypto investments while producing tax-compliant reports with “audit-proof accuracy,” Kovalenko said. A beta version of the software is expected to be released in April this year. Syla will hire a Brisbane-based team to lead the project, Kovalenko said.
There are currently 4.2 million crypto investors in Australia, according to a report by the Select Committee on Australia as a Technology and Financial Centre. Australia is slowly moving towards crypto tax reform following recommendations from the Senate inquiry to change tax laws and introduce licensing and regulatory regimes.
Last year, the country’s tax office notified over 100,000 people of their obligations to pay tax on crypto profits. ATO Deputy Commissioner Tim Loh said his office was “alarmed” that taxpayers believed they could hide behind the supposed anonymity provided by crypto and not pay their fair share.
“While it seems like cryptocurrency operates in an anonymous digital world, we closely track where it interacts with the real world using data from banks, financial institutions, and online cryptocurrency exchanges to track the situation. ‘money to the taxpayer,’ Loh said at the time.
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