Thailand’s Finance Minister recently revealed the final version of the country’s tax framework on cryptocurrencies, according to local news outlet Nikkei Asian Review. Per its report, cryptocurrency investments in the country will get taxed.
The country’s government is reportedly taxing cryptocurrencies to “prevent the expanding sector from being used for money laundering, tax evasion, and other criminals activities.” Thai’s Finance Minister, Apisak Tantivorawong, announced on March 27 that cryptocurrency trades will be taxed with a 7 percent value added tax (VAT), while returns will be taxed with a 15 percent capital gains tax.
Cryptocurrency investors in Thailand have been dealing with uncertainty over the past few weeks, after the country’s central bank banned local banks from trading and investing in cryptocurrencies. Korn Chatikavanij, the country’s former finance minister and chairman of the Thai Fintech Association, revealed the conservative approach didn’t surprise him.
He added, however, that the conservative instincts could end up driving Thai crypto startups out of the country. He said:
"But they have to be cautious not to allow their conservative instincts to result in draconian regulations."
Regulatory uncertainty, according to Nikkei, already saw various Thai businesses move to more crypto-friendly legislations.
Thai Crypto Startups Flock To Singapore
Per the report, Thailand’s crypto startups are tending to register in Singapore, so they can then raise capital through initial coin offerings (ICOs). Six.netowork, a Thai and South Korean joint venture creating a financial services platform, is given as an example.
The company registered in Singapore, and launched its ICO in Bangkok to raise $44 million. The company’s co-founder revealed the startup was working with the Thai Securities and Exchange Commission (SEC) to avoid glitches.
Another crypto startup, J Ventures, had to postpone listing its JFin tokens on a cryptocurrency exchange due to the regulatory uncertainty. The company raised $21 million through the sale of 100 million JFin tokens in February.
Thailand currently has six crypto exchanges, which list a total of 11 cryptocurrencies. The crypto space has been booming in the country, as some shops in high-end shopping malls now accept bitcoin payments to attract clients. The number of weekly bitcoin transactions has surged from 12 million baht ($384,000) to 48 million ($1.5 million) in December 2017.
This type of growth can also be seen in other Southeast Asian countries like Vietnam and Indonesia. These are overshadowed by Singapore, as it favors cryptocurrency-related startups. Vincent Ha, chief strategy officer at Yello Digital Marketing Global, a Six.network partner, stated:
"Many countries in the region, including Vietnam, are crypto-crazy. You can see a lot of ICOs coming out, but they have to go around government regulations, just as in Indonesia."