OrbitLabs will review a “Reverse Charge” tax for Terra Classic, taxing the recipient instead of the sender.
OrbitLabs has suggested conducting a comprehensive analysis of the recently implemented “Reverse Charge” tax mechanism on Terra Classic. This tax mechanism aims to simplify tax processing on the blockchain by deducting taxes from the recipient instead of the sender.
Obtaining the community’s permission would make it possible for OrbitLabs to move forward with the evaluation, which would guarantee the dependability and safety of the system prior to its complete deployment.
LUNC News: OrbitLabs Proposes Testing Terra Classic’s Tax Mechanism
In a post on X (formerly known as Twitter), OrbitLabs expressed its intention to investigate the recently proposed “Reverse Charge” tax method for Terra Classic. Developers StrathCole and HCC proposed the new system, which will eliminate the need for tax management on the blockchain.
The system will accomplish this by automatically charging tax to the transaction recipient. Unlike this method, the sender must include additional tax charges in transactions. OrbitLabs has reminded the community that they must approve the procedure within six days before the review can proceed.
The group is submitting an application for pay per job (PPJ), which will result in a salary of $2,500 USD. Once the job is complete, we will pay out this compensation in LUNC.
Potential Benefits of the Reverse Charge Mechanism
We would audit the code, validate the features, and determine whether the new method aligns with Terra Classic’s objectives to simplify tax management during this evaluation. The described reverse charge method aims to decrease the number of tax procedures and may be less complex than previous models like Tax2Gas.
It is possible that the new method will eliminate the requirement for senders to compute and add additional fees to the transaction, which will result in an enhanced experience for the actual user.
OrbitLabs aims to maintain compatibility with previous systems to minimize disruption to decentralized applications (dApps) and other third-party services operating on Terra Classic. Based on the results of some first tests conducted on Terra Classic’s rebel-2 testnet, it appears that the reverse charge mechanism may be both effective and functionally compatible with older versions.
One of the developers, StrathCole, presented a test result that showed it was possible to take tax deductions without disrupting the operation of other decentralized applications (dApps). For instance, in one test, a user sent one million LUNC through a wallet extension, and the recipient received 995,000 LUNC after tax.
Proposed Work and Timeline for OrbitLabs’ Review
The transaction did not require the sender to incur any additional costs. The suggested assessment will take place within a two-week timeframe, according to the timeline that OrbitLabs has given. The team will thoroughly examine the reverse charge code during the first week to validate its operation and ensure its safety.
Fixing and updating tests would be the focus of the second week, with the goal of ensuring that the mechanism performs appropriately across a variety of scenarios and is compatible with the most recent version of Terra Classic’s software development kit (SDK), which is 0.47.
In the past, OrbitLabs has worked along with the development community of Terra Classic, providing assistance with prior implementations relating to taxes. In this particular instance, the organization has pledged to collaborate closely with the developers of Terra Classic and members of the community in order to tackle any problems that may occur throughout the testing process.
Furthermore, OrbitLabs has completed the Know Your Customer (KYC) verification process using sollidproof.io, meeting the requirements set by Proposal #12129 for code review applicants.
The price of Terra Luna Classic has been maintaining a bullish trend in the midst of these LUNC news reports, with the price currently trading at $0.00009364, representing a 1.97% increase from the 24-hour low.
