The city of Zermatt in Switzerland has started accepting Bitcoin and only Bitcoin as a legal means of paying off one’s taxes.
Zermatt is the second region in Switzerland to make this change. The first one was the city of Zug back in 2017 and has been showing amazing results in terms of tax law compliance and the frequency of Bitcoin payments from the local community.
Although it’s going to be extremely easy for the citizens themselves to pay their taxes with Bitcoin, it’s going to a bit more complicated in the backstages. To be exact, the city of Zermatt will not be receiving direct Bitcoin payments from its citizens as tax, it will be using a middle man. In this case, it will be a Swiss company by the name of Bitcoin Suisse.
All due taxes can be paid via direct transfer to Bitcoin Suisse’s cold wallet or a point-of-sale tool. The change was made by the city due to increasing interest in the blockchain industry and the ever-growing number of Bitcoin investors in the country. The mayor’s office has announced that everything will be done in order to make this service available for the public, make it transparent and most of all trustworthy.
The first promise has already been fulfilled as Bitcoin payments have become available since January 28th, now it’s time to see if the other two promises are kept within the coming months.
Why is paying tax with Bitcoin a good idea?
Many would think that paying the most centralized entity with the most decentralized currency in the world is quite ironic, and they’d be right, it is indeed ironic. But with the slowed progress in the crypto market, alongside fewer and fewer avenues to spend Bitcoin on, investors are becoming restless for freezing their accounts and waiting for an opportunity.
By allowing taxes to be paid via Bitcoin, the market is drained from the supply, thus potentially increasing the price of Bitcoin in the long run, as well as giving the asset another avenue of liquidity, thus potentially increasing the price as well.
Overall, there are two major advantages to this initiative. But the biggest one is still the transparency that is to come from the government. If these specific funds paid by the citizens are displayed accurately, many will finally be able to see where their particular taxes went during government spending projects.
This brings a whole new meaning to “they built it with my money” that people like to say when they see a new government project.