15 Percent Tax Will Increase OTC In Thailand
A couple of weeks ago, the Thailand Ministry of Finance implemented a 15% capital gain tax (CGT) on all cryptocurrency transactions. The new tax is also referred to as a withholding tax on all retail transactions and investment returns.
Initially, it was to be introduced alongside a 7% value added tax (VAT) on individual cryptocurrency investments, however, in a surprising move, the ministry announced that it is waiving the VAT for only the CGT.
Impact on Industry
In an interview with CoinPedia, Wannipha Buakaew of the Thai Blockchain Association, shined more light on the impact of the policy and the future of the industry in Thailand. From her perspective, there is going to be more OTC activities but more importantly, it signifies a new era of recognition for cryptocurrency in Thailand.
“The impact the tax will create is an increase in OTC transactions in the country. On the Plus side, it shows that the Thai government has acknowledged the power Cryptocurrency wields”.
When asked if the 15% rate is exorbitant, she was of the opinion that, for her compatriots, it is, but, compared to countries such as Australia, the rate is reasonably attractive. In Australia and Japan, CGT’s on cryptocurrency are 50 and 55%, respectively.
Wannipha also indicated that the decision will have an adverse effect on foreign direct investment in Thailand on the cryptocurrency front, however, she did emphasize that it is bad for business, but good for state acceptance of cryptocurrency.
“Previously there was no tax on Crypto so Thailand was indeed a popular destination for crypto lovers”, she told CoinPedia. “But now that the tax is in place, foreign investors may look into other destinations such as Belize or Malta”.
Crypto’s Future In Thailand
Despite the ongoing development, the Director of the Thai Blockchain Association believes the future of fintech in general, and cryptocurrencies, in particular, is very promising.
“More and more Thais have taken interest in crypto so I have no doubt that the future is still looking bright”, Wannipaw indicated.
She revealed that three new exchanges have recently opened their doors for business in Thailand. Moreover, trading activities in the past six months have been very encouraging.
For her, the best thing crypto-lovers in Thailand should do is to scale up education about blockchain technology.
“Just like most parts of the word, we need to educate our people to understand cryptocurrency and blockchain”, Wannipaw maintained.
She also indicated that her outfit will begin a dialogue with the state in order to bring about harmonious atmosphere for the crypto industry to thrive in the country. Among many of the things they have earmarked to discuss with the government, is lowering the 15% CGT.
by Frisco d’Anconia