12144 | Review and Testing Support for Reverse Charge Tax Mechanism

OrbitLabs proposes to review and assist with the testing of the passed proposal #12143 ‘Reverse Charge’ mechanism for simplified tax handling on Terra Classic.

Discussion on: Luna Classic Community Forum (LUNC) – Proposal: OrbitLabs’ Review of Reverse Charge Tax Handling on Terra Classic
Validator.info link: Terra Classic (LUNC) Governance — Validator Info

Overview

OrbitLabs proposes to review and assist with the implementation of the “Reverse Charge” mechanism for simplified tax handling on Terra Classic, which aims to deducting tax from the receipient instead of the sender, hence eliminate the need for the sender to attach tax as an addtional fee. Orbit Labs seeks community consent to conduct a review under the terms of PPJ in case the proposed tax implementation passes governance.

Motivation

OrbitLabs has previously voluntarily aid StrathCole in code reviewing and testings of previous Tax2Gas implementation, but found that it is complicated in its implementation, requires necessitating collaboration from multiple parties.

StrathCole and HCC have proposed a new “Reverse Charge” mechanism for simplified tax handling. The new proposal offers a potentially simpler solution that could replace the need for tax2gas, offering automatic tax deduction, backward compatibility with the current tax system, retain compatibility with the third parties systems.

Proposed Work

OrbitLabs proposes to:

• Conduct a comprehensive review of the “Reverse Charge” tax code from PR #525
• Fix interchain tests introduced in SDK 0.47

Timeline and Milestones

Week 1: In-depth review of the “Reverse Charge” mechanism proposal

Week 2: Fix and update existing tests

Budget

Fiat value: $2,500 USD

Note: A spend proposal will be made with the LUNC amount equivalent to the dollar amount at the time the work is completed (review complete, all review comments resolved, ics tests fixed) 

KYC Certification

As per Proposal #12129, reviews approving code on the Terra Classic repositories must be conducted by KYCed individuals. OrbitLabs is KYCed by sollidproof.io.

https://github.com/solidproof/Projects/blob/main/2024/Kien/KYC_Certificate_SolidProof_Individual_Kien.jpg
https://github.com/solidproof/Projects/blob/main/2024/Tien/KYC_Certificate_SolidProof_Individual_Tien.jpg
https://github.com/solidproof/Projects/blob/main/2024/Tuan%20Tran%20/KYC_Certificate_SolidProof_Individual_TuanTran.jpg

Conclusion

By reviewing and assisting with the implementation of the simplified tax handling mechanism, OrbitLabs aims to help Terra Classic overcome the current challenges with tax handling and move towards a more efficient, user-friendly and Dapp-friendly blockchain. We believe this approach balances the need for improvement with careful risk management and community involvement.

We welcome feedback and discussion from the Terra Classic community on this proposal

Cast Your Vote

• Yes: Support OrbitLabs conducting the review with the implementation of the “Reverse Charge” tax mechanism.
• No: Oppose OrbitLabs’ proposal about reviewing the “Reverse Charge” tax mechanism implementation.

• Abstain: You have no strong opinion and will accept the majority’s decision.

• Veto: You believe this proposal is harmful and should not be implemented.