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Thailand’s government announced recently that it will expand its crypto tax plans in order to provide further clarity for crypto traders and businesses. The country’s central bank, the Bank of Thailand, stated in December that it would draw up new measured for regulating crypto-related activities for businesses and individuals alike.
Meanwhile, the revenue department was looking to introduce new laws for taxing digital currencies. However, on January 9th, the Thai Digital Asset Association contacted the revenue department, requesting clarity on capital gains and withholding taxes.
The country’s PM Prayut Chan-o-cha instructed the revenue department to look into the matter and provide further clarification for investors, business, and the public. Now, less than a week after Thailand’s government revealed original plans to introduce a 15% capital gains tax for the crypto industry, the Thai revenue department released a new statement saying that it will work on clarifying them further.
The department is already in discussions with several entities, including the Securities and Exchange Commission, the Bank of Thailand, and the Stock Exchange of Thailand.
After requesting further clarity from the revenue department, the Thai Digital Asset Association’s president said that most crypto investors are not trying to avoid paying taxes, but are concerned whether their move would violate the Revenue Code. In other words, there is a growing concern among Thai traders that back taxes or even penalties might be applied to profits, as well as trades conducted in the past.
The government responded by saying that there is no intention to hinder innovation or development, not only in crypto and fintech, but in any industry. However, the spokeswoman stressed that the government cannot afford to rush and support crypto trading without gaining a thorough understanding of it. If it did, this could potentially lead to a crypto crisis, similar to a financial crisis.
As for the new taxes, they would only be applicable to profits achieved through trade and mining. Thai crypto exchanges would not be included. The largest of these digital asset exchange platforms are already affiliated with billionaire business moguls and commercial banks.
Those who fail to comply with the new filing requirements could end up facing heavy penalties, however, which only amplifies the need for clarity in order to avoid such situations.
The country’s move to introduce regulations regarding digital currencies and taxation of crypto came after numerous warnings that the central bank issued to commercial banks and businesses regarding digital currencies, and accepting crypto as payment methods.
While the Bank of Thailand did intend to draw up new measures to regulate crypto-related activities, there is also fear that increased regulatory pressure could damage the country’s tourism ministry’s efforts, which were directed towards attracting crypto whales and digital nomads to try and revive the tourism following its drop due to the COVID-19 pandemic.