Opposition from both sides of the political divide is mounting in Thailand over the Department of Revenue’s proposed 15% capital gains tax on crypto trading profits.
Earlier this month, Thailand’s Revenue Department announced that it would impose a 15% capital gains tax on profits from crypto trading and mining. The government is expected to finalize the details and clear up some of the confusion that set in for local crypto businesses on January 20.
While the clarity and regulations for the industry are most welcome, there has been growing opposition to the new tax which some politicians say could hurt the country.
Thailand’s military-backed government is facing major economic hardship following a nearly two-year-long lockdown crippling thousands of small businesses, many of which depend on tourism. Imposing new taxes is a way for her to claw back some of the expenses created by covid stimulus packages. A new tourist tax is also due to come into force in April.
‘Income opportunity for the new generation
Korn Chatikavanij, the leader of the Kla party, is a politician opposed to the new crypto tax. According to local media, he said all profitable transactions would be subject to the 15% tax and income calculation would become a complex procedure. He commented that “the revenue department collects VAT like crypto is a commodity,” before adding:
“Therefore, there will be a double payment of VAT on cryptocurrency transactions where you have to pay VAT when selling the product and pay another VAT on selling crypto in baht,”
Other political parties have also voiced their disapproval with opposition Pheu Thai party Registrar Jakkapong Sangmanee saying that crypto traders have already paid personal income taxes, so an additional tax will hurt businesses. retail investors but will benefit institutional investors, leading to more inequality. Thailand has one of the largest wealth gaps in the world according to Credit Suisse.
Thai Sang Thai party leader Sudarat Keyuraphan added that the government lacked vision in trying to tax crypto in a country that was trying to promote digital assets. “It will block an income opportunity for the next generation,” she added.
Anti-Crypto Sentiment Prepares to Bank
Thailand has seen an explosion in crypto trading during the 2021 bull market. Traditional stock investing has been largely limited to wealthy institutional investors, but crypto is accessible to everyone.
The central bank is vehemently opposed to decentralized digital assets despite the fact that a number of retail banks have recently made large investments in local crypto exchanges. He is planning a “red lines” report for crypto this month in which he is expected to further crack down on the fledgling industry.
Last year, the Bank of Thailand repeatedly warned major banks and corporations against accepting crypto as a form of payment, saying it would hurt the already struggling economy.
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