Proposal # 12143 Terra Classic
$LUNC
This proposal seeks approval to implement the “reverse charge” mechanism on Terra Classic and replace the tax2gas approach. The reverse charge solution simplifies tax handling by automatically deducting the tax from the amount sent before it reaches the recipient’s wallet, eliminating the need for the sender to pay the tax as an additional fee. The system maintains full backward compatibility and gives developers an option to continue using sender-side taxation for fund transfers if they choose. The approach also solves the double taxation issue on contracts that is present in the current system.