Thailand’s Revenue Department has rebuffed an appeal from crypto asset operators to reject a tax-collecting agency’s proposal of a 15 percent tax. The tariff, which would be levied against capital gains and returns from investing money in crypto assets, has been met by widespread opposition from within the sector.
Speaking on the decision, the director-general of the Revenue Department, Pasong Poontaneat, stated that the withholding tax was appropriate irrespective of individual opinions, as the department itself had no intention of supporting retail investors who trade crypto assets.
Poontaneat’s comment followed on the heels of a letter sent to the deputy prime minister, Somkid Jatusripitak, by a number of crypto asset associations and operators, which requested that the government re-think the tax due to its potentially damaging impact on start-ups and their ability to fundraise.
Despite this plea, the reply received was an unequivocal one, with finance minister Apisak Tantivorawong maintaining that the law was both necessary and justified.
The Withholding Tax Explained
The royal decree associated with this withholding tax is expected to take effect almost immediately following receipt of the Council of State’s approval, meaning that it’s likely to affect digital asset associations and operators before the year is through.
Aimed at protecting retail investors from losses incurred through trading digital assets, whilst also preventing these from becoming an instrument used for money laundering, the law will add a 7 percent VAT charge to the trading fee, as well as a 15 percent withholding tax to capital gains and returns from investments.
The bill will also attempt to narrow the definition of digital assets, so that the law applies to cryptocurrencies and digital tokens without influencing other asset classes like electronic data.
Its impact on regulation and consumer safety remains to be seen.
