Several countries are trying out new ways and mechanisms to incorporate cryptocurrencies into their economic infrastructure. The modern world is now accepting the rise of the crypto and blockchain industry. Therefore, more countries are being open to the idea of accepting or regulating cryptocurrencies.
Thailand is the second-largest economy in South East Asia. The country has fancied the idea of cryptocurrencies which has helped in the growth of the country’s crypto community. Previously, Thailand had introduced crypto taxes in its legislative structure. The move was applauded as it showed that the country recognizes crypto. It was considered to be a breakthrough for the future of digital assets in the country.
Thailand’s Federal Cabinet revises tax laws
Even though the move to introduce crypto taxes was appreciated, it was still considered a little harsh. The crypto community was not pleased with the proposed tax margins. However, to encourage the growth of the digital asset sector, Thailand’s cabinet has eased out the tax rules in the country. The country has recorded a spike in crypto trading. Thus, these initiatives will further propel the growth of the sector.
The details of the tax relief were shared by Thailand’s Finance Minister Arkhom Termpittayapaisith through a news conference. The new set of rules will allow traders to offset losses from cryptocurrency investments against gains for tax purposes. They will also be exempted from a 7% value-added tax (VAT). However, the exemption will be only offered to those traders who trade on government-authorized cryptocurrency exchanges.
The tax relief is only temporary. It will last from April 2022 to December 2023. After this, the previous taxes will be revoked on the crypto community. The Thailand central bank’s retail digital currency will also be exempt from the 7% tax during the tax exemption period.
The proposal draft for the tax exemptions has been crafted under Thailand’s Revenue Code. It will help to expand the reach of the competitive crypto industry in the country. Additionally, it will contribute to the development of an effective payment system designed to boost the digital economy.
The skyrocketing crypto popularity in Thailand
Over the past year or so, the digital asset industry is riding high in Thailand. At the start of 2021, there were about 170,000 trading accounts in the country. The figures spiked to almost 2 million at the end of the year. The numbers are constantly growing as we move 3 months into 2022.
Thailand’s most popular crypto asset is Bitcoin. Investors and traders have shown keen interest in Bitcoin while investing their capital for short-term or long-term goals. The increasing number of crypto investors has helped the country’s crypto market to take over the number of stock market investors in September, last year. The Government of Thailand had also ignored a 15% tax proposal of crypto gains in January. The decision was taken after a severe outcry from the country’s crypto traders.
Nonetheless, the Federal Cabinet of Thailand has approved the proposals of tax exemptions. The proposed tax relief will also assist direct and indirect investments for new startups. These startups will be given a tax break for the next ten years, until June 2023. These efforts and initiatives will catalyze the growth of Thailand’s business and investment community.
The Thai crypto community is taking a sigh of relief over the proposed tax changes. It is expected that the digital asset sector will experience a surge in activity in the coming days. The Thai economy is also anticipating a boost by its crypto-friendly measures. However, the influence of these decisions will be observed in the coming few weeks or months.