Thailand’s Excise Department noted that it wants to shift its long-time focus on stocks to another direction, bitcoin revolution website. The department assured it would conduct a proper evaluation before compelling any new tax regime.
The MP of the ruling party, Watanya Wongopasi, is of the stance that due diligence should be carried out by the Excise Department before imposing any tax.
Read on for more details.
Watanya Wongopasi, both a member of Palang Pracharath Party (PPRP)— Thailand’s ruling party and parliament (MP), has prompted the department in charge to adequately evaluate the market dynamics before enforcing any tax program. She also added that imposing such taxes could deter foreign investors from trading in that field.
She said this in a post on Facebook on January 20th, urging the department to conduct due diligence before imposing any tax on crypto trading. The Facebook post featured a meeting summary by members of Thailand’s Committee on Finance, Financial Institutions, Financial Markets, and Monetary Affairs.
The topic for discussion at the meeting was the various aspects of crypto taxation. “If we looked at the decentralized nature of the crypto space, then it would be even clearer that it would be difficult to collate information about those carrying out crypto transactions.” –Yutthana Srisavat.
The president of the Thai Fintech Association, Chondalet Khdmarattana, called on the government to impose a free market so that they can compete with other countries. The legislators proposed a 15% tax on crypto and are working assiduously to impose it. However, there was skepticism that compelling a tax regime on stock trading and crypto would hit the market liquidity, causing it to wane by 40%.
Yutthana Srisavat, the CEO of iTax, thought that the governments should evaluate imposing a VAT or corporate tax rather than exacting taxes on profits earned via crypto trading. He added that taxation would affect foreign traders more because trading costs could surge more than 160%, which would be bad for business and, in turn, the economy.
Srisavat said the crypto taxation could not be easily implemented because investors are not ready and have not obtained the essential data. He explained that people trade cryptocurrency on a virtual exchange, some even decentralized, making it futile to recognize the seller or buyer to file taxes. He went on to say that digital asset operators in Thailand can only compete with other nations of the world if they were allowed to grow.
The president of the Stock Exchange of Thailand (SET), Pakorn Peetathawachai, and SET senior executive vice-president Soraphol Tulayasathien suggested that the government raise funds for infrastructure so it could save 250 billion baht ($7.6 billion). They all agreed that liquidity in the Thai stock market was important to maintain the Thai economic system.
The Excise Department has, however, only made little progress with taxing crypto as it directs most of its resources to tax the stock market. While the department is still looking for a way to regulate the crypto space, it is studying the industry to find the right approach to implement the proposed regulations. It will only introduce taxation after careful consideration.
However, the proposal to tax crypto by 15% hit a brick wall, with several experts, including Tipsuda Thavaramara, the former Thai SEC executive going against it. Thavaramara said that the three structures of taxation on crypto that the Thai revenue department is developing are deeply flawed.
According to the Ex SEC chair, the capital gains tax is impractical and unfair because crypto exchange operators are not responsible for paying customers any return on investment. He said that taxing capital gains on crypto would introduce complications in the retail payment sector because services linked with crypto payment would need to charge their customers tax on capital gains.
Crypto taxation and regulation have been hot topics in Thailand, especially after the government proposed a 15% taxation on crypto gains. Several current and former government executives and industry experts have warned against the proposal, stating the astounding negative effects that its implementation could bring. The Thai prime minister has given heed to public opinion by instructing the revenue department to offer clarification for investors and the public on crypto taxation soon.