Thailand backs down to crypto backlash, won’t tax transactions at 15%
Thailand has dropped plans for a 15% crypto tax on transactions after pushback from investors — a move that surprised the local industry accustomed to cautious regulations.
The country’s revenue department published its rulebook earlier this week, which notably excluded the proposed flat withholding tax on crypto.
Stakeholders can still submit comments on the Bank of Thailand’s proposal until next Tuesday (February 8), but it’s expected to pass without the 15% rate.
Thai tax preparers now say traders can report crypto-related income (like from trading or mining) as regular capital gains.
Traders can also offset their gains with losses from the same year.
Crypto insiders had urged the government to reconsider as an excessive tax would hinder the new industry.
Crypto exchange Upbit’s chief exec Pete Peeradej Tanruangporn praised the Thai government’s willingness to listen to feedback.
“The revenue department did a lot of homework and reached out to crypto operators as well to get feedback,” he said (via Financial Times).
Thailand crypto cautious after 90s financial crash
Thailand’s central bank and local SEC were met with criticism last month for planning to limit mainstream adoption of crypto for payments.
The Bank of Thailand and SEC cited a need to “avert potential impacts on the country’s financial stability and economic system” in a joint statement.
Both institutions argued that crypto payments for goods and services would not benefit consumers.
It’s worth noting that Thailand suffered a catastrophic financial crisis in 1997 and 1998 that remains a living memory for those that lived through it.
So, out of an abundance of caution, Thailand’s securities watchdog banned exchanges from listing meme coins like Dogecoin and Shiba Inu, fan-related tokens, and NFTs last year.
The local SEC said these digital assets serve “no apparent purpose or substance.”
Last July, the Thai SEC also pursued criminal charges against top crypto exchange Binance for operating without a license, and even proposed limiting crypto investing to those who earn at least 1 million baht ($30,000) per year.
One of the country’s most popular crypto exchanges, Bitkub, currently processes around $70 million in trade volume per day, according to CoinGecko. It’s unclear how much local trade happens on Binance and Upbit.
Thai population interested in Bitcoin
About 88% of Thai residents who responded to a February 2021 poll had heard of Bitcoin, and 42% of those interested in Bitcoin said they planned to invest within the following year.
Respondents’ chief obstacles to investment included lack of discretionary income and wanting of understanding of what Bitcoin is.
Crypto trading has grown in Thailand since then, particularly throughout the coronavirus pandemic, noted Financial Times.
Tourism typically generates one-fifth of Thailand’s GDP but tanked when global borders closed for COVID-19 — likely making regulators more amenable to crypto businesses for their potential revenue.
“Governments are not monolithic entities. They have different parts representing different economic interests, and are generally trying to keep up with public sentiment,” tweeted analyst Lyn Alden in response to the news.
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