blockworks.co
Australia has dolled out a government grant to a Brisbane-based company to build out its tax reporting software as the nation seeks to close the gap on unrecouped cryptocurrency tax receipts.
The second round of the “Boosting Female Founders Initiative” has awarded crypto accounting and tax advisory firm Kova Tax’s Syla platform $387,550 (US$277,929) in grant funding, according to a statement on Tuesday.
The initiative targets female entrepreneurs seeking access to finance for the growth of startups. Syla was announced as one of 38 recipients to receive the grant from a pool of over 2,500 applicants for a total of $12 million (US$8.6 million) in funding.
Minister for Women’s Economic Security Hon. Jane Hume and Hon. Angus Taylor MP said Tuesday the initiative aimed to promote female-led startups and assist in Australia’s economic recovery.
“These startups demonstrate the incredible Aussie ingenuity we want to foster around the country,” Taylor said.
The cloud-based crypto tax reporting and portfolio management software utilizes a proprietary artificial intelligence-driven engine to automate crypto tax reporting, similar to how Koinly and CoinTracker operate.
It marks 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 hard for accountants to process all crypto transactions and achieve correct tax outcomes for their clients due to the quantity and complexity of the transactions and also lack of guidance from the Australian Tax Office,” Kova Tax director Maryna Kovalenko told Blockworks.
“Investors want to know they are paying the lowest tax possible and ensuring that they are not at risk of an audit.”
The web-based platform, designed by tax professionals, allows traders to manage their crypto investments while producing compliant tax reports with “audit-proof accuracy,” said Kovalenko. A Beta version of the software is expected to be released in April this year. Syla will be hiring a Brisbane-based team to head off 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 edging toward crypto tax reform following the senate inquiry’s recommendations to amend tax laws and introduce licensing and regulatory regimes.
Last year the country’s tax office informed more than 100,000 individuals of their obligations to pay tax on crypto profits. ATO’s assistant commissioner, Tim Loh, said his office was “alarmed” taxpayers thought they could hide behind the supposed anonymity crypto provides and not pay their fair share.
“While it appears cryptocurrency operates in an anonymous digital world, we closely track where it interacts with the real world through data from banks, financial institutions and cryptocurrency online exchanges to follow the money back to the taxpayer,” Loh said at the time.