PwC Corporate Tax Partner: Singapore To Benefit Crypto Businesses By Cutting Taxes
Singapore is currently making a move that may help the local crypto community a lot. The country is planning to exempt some digital currencies from a tax called Good and Services Tax. The idea is that this could benefit several crypto-related businesses and help the growth of the industry in the country.
An expert from PwC Hong Kong, Gwenda Ho, recently commented on this decision made by the government of Singapore. According to the South China Morning Post, she affirmed that the idea of dropping the taxes to 7% would have a very positive impact on the local crypto market. Not only crypto exchanges would be getting advantages, but also investors, asset managers, and entrepreneurs.
The law is important, in her opinion, because it would make the taxes over crypto exchanges more equal to some competitive countries such as Japan, Hong Kong, Switzerland, the European Union, and Australia. All these countries, according to her, have similar taxes for the industry.
She also affirmed that tokens that can be used for digital payments and are created from Initial Coin Offerings (ICOs) can also be exempt from taxes. This would boost Singapore’s competitiveness a lot, in her opinion.
Hong Kong, which she compared to Singapore, is mostly tax-free, so this is a reason why more people could start moving from Hong Kong to Singapore in order to invest in cryptos.
The tax exemption is being considered by Singapore’s Inland Revenue Authority since the beginning of the month. If it is accepted, it will start next year and overhaul most of the system that is currently being used. Currently, digital payment tokens are created as a taxable supply of services by the country.
According to the bill, two core changes will happen in the legislation. The first one is that using the digital tokens to pay for stuff will not “give rise a to a supply of these tokens” and the other one is that they will start to exempt from the GST taxes. The bill is expected to be decided before the end of the year.