Terra Luna Classic (LUNC) Community Approves New Tax Handling Proposal Targeting Simplified Tax System

The Terra Luna Classic community has approved a new tax handling proposal aimed at simplifying the tax system on the Terra Classic blockchain.

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 will change how taxes are deducted in transactions, making it easier for developers and users to navigate the system.

This approval comes amidst recent token burns and ongoing efforts to support LUNC through various community-driven initiatives.

Tax Handling Proposal Passed By Terra Luna Classic

According to a recent announcement, the newly introduced Reverse Charge mechanism will allow for taxes to be directly debited from the transaction amount before it is credited to the recipient’s wallet. This eliminates the need for senders to pay extra taxes, making it convenient for both the developer and the end user.

In this system, the tax is directly removed from the transferred amount, negating the need for complicated tax management by developers of dApps and interfaces. The new tax system also supports backward compatibility, allowing dApps to still use sender-side taxation if 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.

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