Thailand’s finance minister expects crypto regulations to be put into effect in the coming month. The military government is edging closer to the April implementation date of crypto regulations. The government expects the taxation of crypto to curb money launderers, tax evaders and criminal activities that use Cryptocurrencies as a facility.
The policy is a product of weekly deliberations and cabinet meetings attended by Apisak Tantivorawong, the Thailand finance minister who later came out on Tuesday to disclose the agreement. The finance minister argues that the imposing of these rules would augment investor protection.
More time to inform the SEC
The draft version of the royal decree further adds that Initial Coin Offering (ICO) issuers in the country will be given 90 days to notify the Security Exchange Commission of their intentions before the law takes effect. The 90-day window is a revision of the previous 60-day period given to market participants. Participants had earlier argued that the two-month period wasn’t reasonable.
The bill in addition to increasing the period also makes some amendments in the definition of digital assets. The bill simplifies the description and points out explicitly to digital tokens and Cryptocurrency. In the process, the amendment eliminates a misinterpretation with other potential classes like the electronic data that was witnessed in the previous bill.
Capital Gains Tax
According to the deputy finance minister, taxations, as recommended in the previous draft, remained unchanged. Investors would still be required to pay 7 percent vat on all trades involving Cryptocurrency and 15 pc capital gains tax on their revenues. These figures will be applied regardless of the trade’s profitability.
In an additional statement, Mr. Apisak confirmed that his office and SEC were working on drafting policies that would oblige all digital asset dealings including the digital asset exchanges, dealers, and brokers to register with relevant authority before continuing their operations. Furthermore, the crypto dealers would still be required to report their source of assets and transaction amounts to the anti-money laundering office in an effort by the government to protect retail investors.
Early reactions were expressed with the chairman of Thai Fintech association been quoted by Bangkok Post saying that the law would hinder the growth of startups as they would have to register businesses overseas to avoid the levies been imposed. He further added that businesses would flee to Singapore mainly because of their capital gains tax waiver and a better environment for ICO prospects.
The bank of Thailand had earlier in February, ordered financial institutions to avoid crypto investments altogether. This included an order not to facilitate crypto trading as well. The authorities went as much as banning crypto purchases using credit cards as well.
In a recent study by bitcoin.com, 46 percent of token startups failed right after their ICOs or because they weren’t able to complete funding. The report in 2017 drew the numbers from the Token data website. In as far as 2018 is concerned, 50 of 340 have failed after completion of their ICO.