By
Godfrey Benjamin
April 2nd, 2024
The government of the country has announced the new regulations on the cryptocurrencies and digital tokens. The conservative decision preceded by harsh actions of the central bank of the country may slow down the pace of development of the crypto sphere.
The rapid expansion of the cryptocurrencies becomes a threat for the governments. The sphere has incredible pace of development and obviously lacks the regulations. Even though the progress cannot be stopped, governments all over the world consider different ways of resisting the financial crimes in the sphere. Money laundering, tax evasion – the world of the cryptocurrencies has a lot to offer to the black market. Thailand’s military government recently made a big step towards the crypto sphere regulation.
Finance Minister of Thailand Apisak Tantivorawong announced on the 27th of March that the government of the country wants to regulate the crypto sphere and sets the relevant tax framework. The news came out after a weekly cabinet meeting.
The new laws on the cryptocurrencies and digital tokens cover all crypto trading and investing practices. The taxes are set to the following rate: 7% value added tax on all crypto trades and a 15% capital gains tax on the returns. The regulations have been in development during several months. Two drafts were approved by the middle of the March; the further development of the tax frame got stimulated by the Thailand’s Deputy Prime Minister Wissanu Krea-ngam.
The decision of Thailand’s military government is seen as a conservative one. However, it got support from influential representatives of the society. Korn Chatikavanij, the former finance minister and chairman of the Thai Fintech Association, said: “They have to be cautious not to allow their conservative instincts to result in draconian regulations.”
The announcement of the tax framework has not become a big surprise. In February 2018 Thailand’s central bank made a notable decision: it set a ban on local banks investing and trading in cryptocurrencies. No wonder, the crypto society of the country lost the confidence in the future of this sphere in Thailand.
While the tax conditions in Thailand are to become strict, more and more startups prefer to get officially registered in Singapore. This country has created crypto-friendly space and attracts progressive projects from Thailand. A striking example of the situation is Six.network. The project that aims at developing the digital economy by building a better infrastructure was created by the united efforts of the specialists from Thailand and South Korea. However, Six.network is registered in Singapore and has already started the ICO to raise $44 million.
South Korea deserves a special mention while speaking about the tax framework announced in Thailand. This country has attracted lots of attention with its decisions on the crypto regulations. Another turn is expected to come in June 2018. The country plans to follow the example of Thailand and also set the tax framework for the cryptocurrencies.
The decision of Thailand’s military government is controversial. On the one hand, it may cause a massive brain drain among the crypto society. On the other hand, ignoring the fact that crypto projects attract millions of dollars without any regulations may seriously damage the economy of the country.