Cryptocurrency enthusiasts in Thailand, a country that’s set to tax crypto investments, are reportedly fighting for the country’s Finance Ministry to rethink or delay applying taxes to cryptocurrency investments, to keep projects developing within the country.
As recently reported, Thailand’s Finance Minister recently revealed it’s set to tax cryptocurrency trades with a 7 percent value-added tax (VAT), while taxing returns with a 15 percent capital gains tax. The move, according to the Bangkok Post, saw various crypto enthusiasts in the country demand a rethink.
Their goal is to get the country’s Revenue Department to consider changing the tax policy so it benefits the cryptocurrency ecosystem. According to Thuntee Sukchotrat, the CEO of local cryptocurrency exchange JIBEX, a revamp could ensure greater competitiveness compared to other local markets.
Per his words, taxes can be an obstacle for startups trying to raise funds through initial coin offerings (ICOs) in the country. Sukchotrat further revealed cryptocurrency wallet services need to apply for a license with the country’s Securities and Exchange Commission (SEC) if they don’t use baht, the country’s fiat currency, to trade cryptos.
Moreover, wallets using baht are required to have a minimum registered capital of 200 million (about $6.4 million), and apply for a license with the Bank of Thailand, the country’s central bank. He added:
"I think that financial and investment literacy will be the most important factor for investor protection. While startups and technology companies [should be able to] raise funds from the Thai market, otherwise we will lose good ICO transactions to other markets.
Sukchotrat noted that if regulations are too rigid, investors will simply use global cryptocurrency exchanges, where they can trade without having to worry about tax obligations. As covered, some ICO operators and investors in the area flock to Singapore for its crypto-friendly regulations.
Per the exchange’s chef executive, only a handful of small-scale ICOs and investors will keep investing in Thailand if rigid regulations are imposed. Bhume Bhumiratana, a technology consultant at the SEC and the country’s Fintech Association noted that:
• "Tax collection should align with specific assets because digital tokens differ in terms of asset value. It is hoped that the Finance Ministry and the Revenue Department will consider issuing another law to delay the implementation of digital asset tax."
In its report, the Bangkok Post revealed the SEC’s regulatory framework will see ICO operators, cryptocurrency exchanges, brokerage firms, and those operating cryptocurrency wallet services apply for licenses with the regulator. ICO operators will, in fact, have to inform it before their token sales.