Mixed signals for crypto in Thailand despite tax cuts
On February 7, Reuters reported that the Thai Ministry of Finance will waive corporate tax and value added tax for firms conducting initial coin offerings (ICOs) for investment.
According to government officials, companies will have access to alternative methods of raising capital through token issuance in addition to traditional methods.
The military-backed Thai government estimated there will be about $3.7 billion in investment token offerings over the next two years, according to the report.
However, it noted that there would be a tax loss of about $1 billion by offering these incentives. Last year, the government scrapped plans to charge 7% VAT on crypto trading for exchanges and retail investors.
Conflicting crypto messages in Thailand
Cryptocurrency trading and adoption is popular in Thailand, but there have been conflicting messages from the ruling elite.
Thailand’s Ministry of Tourism has tried to promote the site as crypto-friendly. However, the regime banned the use of crypto-assets for payments last year, and the central bank has advocated a wider crackdown.
The Thai SEC is drawing up stricter rules for crypto trading and investing in line with measures taken worldwide following the FTX collapse in November.
It remains to be seen whether companies issuing tokens eligible for these new tax breaks will have to register with the Norwegian Financial Supervisory Authority and comply with the rules, but it is highly likely.
According to research by crypto tax software company Recap last month, Thailand’s capital Bangkok is emerging as a new crypto hub. But without the clarity that Singapore and Hong Kong have, it may be difficult to compete.
Industry analysts have suggested that a tightening of regulations in Thailand could hinder the country’s ability to become a regional crypto hub.
“Thailand is tightening rules on crypto trading and digital asset advertising as well. With stricter rules in place, it will be interesting to see whether this helps or hinders Bangkok’s place as a crypto hub in the coming months,” Recap CEO Daniel Howitt said last month .
Thailand’s largest crypto exchange, Bitkub, has about $29 million in current daily volume, according to CoinGecko.
The markets are pulling back again
Crypto markets are in retreat again, with total capitalization down 1% on the day to $1.06 trillion at the time of writing.
BTC had lost 1.4%, breaking out of its four-day channel to trade at $22,000. Meanwhile, Ethereum held steady at $1,564, having lost just half a percent on the day.
