Speaking after a weekly cabinet meeting on March 27, Thai finance minister Apisak Tantivorawong announced the government’s tax framework for cryptocurrencies that will reportedly encompass all retail trading and returns on cryptocurrency investments. Investors will be required to pay 7 percent in value-added tax (VAT) on all crypto trades alongside a 15% capital gains tax on returns, the Nikkei Asian Review reported.
As reported previously in mid-March, the Cabinet of Thailand – the government’s executive branch – has already approved two royal decree drafts concerning the regulation of cryptocurrency transactions and enforcing taxes on crypto-related investments. The move to fast-track the new laws with the introduction of two royal decrees comes at the behest of Thailand’s deputy prime minister Wissanu Krea-ngam calling for the cabinet to “comprehensively regulate” the nascent but growing domestic ICO and cryptocurrency sector.
The Nikkei report states that Thailand’s ruling military government is looking to regulate the cryptocurrency market to ‘slap investors dabbling in digital coins with taxes to prevent the expanding sector from being used for money laundering, tax evasion and other criminal activities.’ While the claim is true to a certain extent, deputy PM Wissanu has previously stressed that the new laws aren’t meant to curb or prohibit cryptocurrency activity or ICOs in Thailand but safeguard adopters instead.
The government’s move to regulate the sector with a conservative, soft-touch approach has found support from former Thai finance minister Korn Chatikavanij who now serves as chairman of the Thai Fintech Association. “[T]hey have to be cautious not to allow their conservative instincts to result in draconian regulations”, the former finance minister told Nikkei.
Korn also warned of the growing trend of Thai entrepreneurs registering their startups in technology-forward destinations like Singapore that have demonstrated a friendlier regulatory climate for fundraising through initial coin offerings (ICOs).