Terra Classic’s New Reverse Charge Tax System Proposed for Review

OrbitLabs has suggested a comprehensive review of Terra Classic’s proposed "Reverse Charge" tax system, designed to streamline tax processing on the blockchain.

Instead of taxing the sender, the new system would deduct taxes from the recipient, simplifying transactions. However, before moving forward, the community’s approval is necessary to ensure the system’s security and reliability.

The proposed system, introduced by developers StrathCole and HCC, aims to automate tax deductions, eliminating the need for senders to calculate and add tax fees. This proposal stands in contrast to the current system, where the sender is responsible for including tax charges in each transaction.

OrbitLabs seeks approval within six days to begin the review process, offering a pay-per-job compensation model of $2,500, payable in LUNC upon successful completion.

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The review will focus on auditing the code, validating the mechanism’s functionality, and ensuring it aligns with Terra Classic’s goals of simplifying tax management. Early tests on Terra Classic’s rebel-2 testnet indicate the mechanism may be effective and compatible with previous systems. In one test, a user sent 1,000,000 LUNC, with the recipient receiving 995,000 LUNC after tax deductions, with no additional fees for the sender.

If approved, OrbitLabs plans a two-week timeline for the review. The first week will focus on security and functionality assessments, while the second week will involve finalizing tests and ensuring compatibility with Terra Classic’s SDK version 0.47.

Alexander Stefanov