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Thailand’s government has taken steps to take advantage of the growth of the digital asset industry by allowing tax-free issuance of digital tokens for investment.
According to a report by Reuters, Thailand’s cabinet recently agreed to forgo corporate income tax and value-added tax (VAT) for companies that issue investment tokens. The deputy government spokesman Rachada Dhnadirek announced the news, stating that companies will be able to raise capital using alternative ways such as investment tokens, similar to initial coin offerings (ICOs) and cryptocurrencies, in addition to traditional methods like bonds and debentures. Rachada also noted that the government anticipates that the investment token offering will generate $3.7 billion worth of Thai baht over the next two years, with the state expecting to see a potential loss of nearly $1 million worth of tax revenues of in baht.
Thailand’s cryptocurrency tax rulings
Over the last few years, Thailand has been working towards setting its local crypto-related taxation rules with more precise infrastructure in place. Previously, authorities had suggested implementing a 15% capital gains tax for investors in early 2022, but the government later discarded the plans, adding a 7% VAT exemption for crypto traders from trades conducted on authorised exchanges a few months later. Last year, Thailand’s local regulators were also working to introduce crypto regulations on a broader scale and the Securities and Exchange Commission (SEC) of Thailand served to ban the use of cryptocurrencies for payments in March 2022.
The move by Thailand’s government to waive corporate income tax and VAT for companies that issue investment tokens could encourage more companies to enter the digital asset industry and raise capital through alternative means. It remains to be seen whether this move will have the intended effect of boosting the Thai economy and generating significant investment, but it does indicate that the government recognises the potential of digital assets and is taking steps to harness their growth.