Thailand’s Finance Minister Apisak Tantivorawong announced on March 27, 2018, that the country’s military regime is planning to tax cryptocurrency. The move is creating uncertainty in a region which is promoting Singapore to stay ahead and take control of the leadership in the sector.
Cutting out a Slice of the Pie
The country’s military leaders want to impose taxation on cryptocurrencies in the island country in an attempt to prevent the growing industry from being used for illegal activities.
Not only is the regime is looking to tighten the siege on things like money laundering and drug trafficking, but they also appear poised to even profit from the regulations.
As such, the government is now preparing a regulatory framework which will focus entirely on the cryptocurrency industry.
According to Nikkei, investors dealing with cryptocurrency will have to pay a seven percent value added tax on all of their crypto trades as well as 15 percent extra on capital gains made from speculation.
Bank of Thailand’s ban
The announcement comes a few weeks after the Bank of Thailand’s ban on cryptocurrencies.
The two events come as proof of the conservative aspect of the military regime which exerts a strong influence on the way the country’s financial policy is conducted.
The former prime minister and chairman of the Thai Fintech Association Korn Chatikavanij told Nikkei that the bank’s move was no surprise as the conservative regime is known to be fiscally moderate.
The former official considered that this traditional aspect of the system could also be its demise. Chatikavanij stressed:
“But they have to be cautious not to allow their conservative instincts to result in draconian regulations.”
Cryptocurrency-Related Companies Fleeing
Apart from the nation-wide ban and the tax impositions, Thailand’s crypto environment is going through a rough phase. As relevant companies and entrepreneurs look to unveil their projects or begin raising capital through Initial Coin Offerings (ICOs), many are turning away from the country and registering their startups in other crypto friendly regions such as Singapore.
For instance, Six.network, a Thai-South Korean venture which offers decentralized financial services, set up shop in Singapore as a way to circumvent the country’s growing demands regarding the crypto industry. The firm also announced it was launching an ICO On March 27, 2018, in Bangkok. The company was able to raise $44 million.
Natavudh Pungcharoenpong, one of the company’s co-founders, said the firm was cooperating with a Thai regulator along with the Securities and Exchange Commission Thailand (SEC), to make sure it goes through all the needed compliance. With the harsh environment for cryptocurrency-related companies in the country, other entrepreneurs have adopted an even more cautious approach.
JFin, another Thai venture that was planning to jump start its project and list its digital coins on exchanges, has opted to postpone it to a later date to avoid the current regulatory uncertainties. Another hotshot company called J Ventures are promoting JFin coin launch. According to Nikkei, J Ventures was able to raise $21 million in a 20 hour period during a pre-sale phase in February.