Australia has long struggled with double taxation on bitcoins. A new draft law aims to respond to the complaints of the Australian fintech sector, which finds this tax outdated.

For a payment with bitcoins, VAT must currently be paid for a purchase. In Australia, where bitcoin is not yet recognized as legal tender, VAT is also added to the purchase of the bitcoins themselves. As a result, both the purchase of bitcoins and the use when purchasing products are taxed.

Finance Minister Scott Morrison wrote in a statement:

The bill ensures that Australians no longer pay VAT on both the bitcoins and the purchase itself. The change in law will fall within the 2017 general announcements.

The purpose of this legislative change is to help cryptocurrency-related businesses. To date, these often stayed away or struggled to keep their heads above water in Australia. The government authorities are increasingly involved with the fintech sector to steer new developments such as Bitcoin in the right direction.

Now that the draft has been put forward, it remains to be seen until it has gone through the political system and been approved by parliament.