TRANSACTIONS involving cryptocurrencies, including digital tokens, will be subject to a 15 per cent withholding tax under a measure approved by the Cabinet yesterday.
Finance Minister Apisak Tantivorawong said the Cabinet approved the draft bill on digital asset business – after it was examined by the Council of the State - before forwarding it for announcement in the Government Gazette. The council had proposed that other currencies be removed from the draft bill and that the provisions for cryptocurrencies and tokens be left unchanged. If there are additional digital currencies in the future, views on them could be presented to the Cabinet for consideration.
The tax collection arrangements for cryptocurrencies could be maintained as proposed by the Revenue Department. Deputy Finance Minister Wisudthi Srisuphan said the 15 per cent tax included the value-added tax (VAT) that would be collected on digital-currency transactions. If there is a digital-currency exchange without any profit generated, only VAT would be levied.
Korn Chatikavanij, chairman of the Thai Fintech Association, said that the association disagreed with a decision providing for tax collection on capital mobilisation through an initial coin offering (ICO) in the draft bill on digital asset business and the draft Code of Revenue for tax collection on income and dividends incurred from investment in digital currencies.The draft bill could prompt the Thai issuers of ICOs to raise capital overseas, he said. “Regulating digital currencies is good for more clarity.
But certainly, by having regulations which we have never had before is a difficult thing to see if it fits properly and, at the same time, to not obstruct growth,” he said. The draft bill’s imposition of the 15 per cent withholding tax and a dividend tax could prove to be obstacles for raising capital through an ICO in Thailand, said Korn, given that the issuers may opt for countries such as Singapore, where regulations are clearer with less taxes.The tax collection from ICOs could come in at less than the government expects or it may not be collected from the current platforms, he said.
The representatives of the association had met officials from agencies such as the Securities and Exchange Commission (SEC), the Bank of Thailand, the Office of Insurance Commission and the Ministry of Finance for discussions on the regulations. Korn said that although the regulations on digital currencies did not reflect the wishes of the financial services sector, he hoped that improvements to the framework could be made in the future.
Natavudh Pungcharoenpong, co-founder of co-chief executive officer of Six Network, yesterday said that the company plans to raise Bt1.4 billion through an ICO of a digital asset known as SIX. The company will join with a South Korean partner to set up a company to raise capital and operate business in Singapore, given that country’s clear regulations on the emerging sector. Meanwhile, the company said it is ready to cooperate with the SEC, the Stock Exchange of Thailand and other agencies if inspection is required for the company’s capital mobilisation plan in the interests of transparency.
Thanawat Lertwattanarak, chief executive officer of JVentures (JVC) of Jaymart Plc, said that the company had postponed its offering of JFin Coins, from April 2 to May 2, citing a long wait for the draft regulations and the concerns this could present for market confidence in the JVC tokens.