Tax Handling Proposal Passed By Terra Luna Classic Community
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The Terra Luna Classic community has approved a new tax handling proposal aimed at simplifying the tax system on the Terra Classic blockchain. This “Reverse Charge” mechanism changes how taxes are deducted in transactions, making it easier for developers and users to navigate the system. Subsequently, the approval of this proposal comes amid recent token burns and ongoing efforts to support LUNC through various community-driven initiatives. Tax Handling Proposal Passed By Terra Luna Classic In a recent announcement, the newly introduced Reverse Charge mechanism will enable the taxes to be directly debited from the transaction amount before it is credited to the recipient’s wallet. This change eliminates the need for senders to pay extra taxes which makes it convenient for the developer and the end user. In this system, the tax is directly removed from the transferred amount so that there is no need for complicated tax management by developers of dApps and interfaces. The new tax system also supports backward compatibility hence dApps can still use sender-side taxation should they wish to do so. This is expected to positively impact the existing Terra Classic users, as well as the developers from other ecosystems who struggle with the integration of the current tax logic into their applications. Eliminating Double Taxation and Reducing Developer Burden One of the major benefits of the Reverse Charge system is the elimination of double taxation for smart contracts. Under the previous system, contracts were often taxed both when receiving and sending funds, which added complexity and additional costs for developers and users interacting with decentralized applications on Terra Classic. Now, taxation will only apply when funds are sent out of a contract to a wallet, ensuring a fairer process. With this new approach, developers are relieved of the need to build custom tax-handling logic, which…
Filed under: News - @ November 2, 2024 9:26 pm