Thailand is apparently planning to ease its taxes regulations even more for digital currency dealers in order to support a business that has blossomed in the Southeast Asian nation in the last year. The government will eliminate a 7% tax on trading on approved exchanges, barely a month after exempting them from a 15% capital gains tax.
Thailand’s cabinet adopted new loosened tax laws on March 8, opening the door for the country’s digital currency trade to expand more aggressively.
Under the new taxation framework, dealers may deduct yearly losses from tax liabilities on digital asset investments. With the very volatile digital asset market, the new regulation will be a lifesaver for traders who have had to pay taxes on profits without regard for times when values fall and their portfolios are practically wiped out.
Even more importantly, the 7% value-added tax has been abolished for dealers who use approved exchanges, according to Finance Minister Arkhom Termpittayapaisith during a press conference.
According to the minister, the new tax system would be in place from April 2022 until December 2023. It will also include trading in the retail digital baht, the country’s impending CBDC, however the exact date for the digital currency’s introduction is unknown.
With its new tax laws, the government also hopes to encourage investment in Thai startups. The cabinet authorized tax incentives for direct and indirect investment in startups, with investors who engage in businesses for at least two years receiving a ten-year tax holiday until June 2032.
A month ago, the country’s tax authorities declared that they were abandoning plans to impose a 15% withholding tax on digital asset transactions. Traders had launched a vigorous protest against the idea, which they said would destroy the expanding business.
As several of Thailand’s registered exchange executives stated at the time, the country’s tax department spoke with a wide range of stakeholders before scrapping the proposed tariff.
Thailand has grown to become one of the world’s largest digital asset marketplaces. According to the government, there are more over 2 million trading accounts on regulated exchanges, up from fewer than 200,000 a year earlier. With tourism suffering as a result of COVID-19-related lockdowns, many people turned to digital assets to supplement their income.
Despite the trade collapse, Thailand’s market is controlled by the Bitkub exchange. According to some estimates, Bitkub, which recently sold a 51 percent interest to Siam Commercial Bank for $500 million, controls almost 90 percent of the Thai market.