The taxing and regulation of cryptocurrency has always been a difficult topic. For eager governments, effective regulatory action is a pipe dream representing significant progress. Successfully regulating the industry could bring in billions of dollars of additional tax revenue and give the governing agency access to technology which is continuing to change the way society views economic transaction.
This consideration is of special importance to Thailand, a country whose involvement with cryptocurrency has been far less antagonistic than some countries in the world. In fact, the country has been somewhat welcoming to the prospect of blockchain technologies, taking steps to welcome the innovative practices into their already-booming technological sector.
But still, there is much to be discussed before the country rolls out a comprehensive and united stance on the status of cryptocurrencies in the modern era. Countries near it have made strides in determining their position on cryptocurrencies. Asia as a continent has incredibly varied in its individual approaches to responding to blockchain business and digital currencies.
China, for example, represents a hardline stance against Bitcoin, banning nearly all trading of cryptocurrencies last year. On the other side of the spectrum sits Japan, who not only made legal but legitimized the currency as a method of payment in 2017. These opposing strategies present a proverbial two-sided option for Thailand. Will the country take the softer approach of Japan, or attempt to adopt China’s hard approach against cryptocurrencies?
Recent talks between industry professionals and potential regulators could help to answer this important question regarding the future of cryptocurrency regulation within Thailand.
Talks This Week
This week’s talks between regulatory authorities and industry leaders will center on the best way to balance regulation goals with the needs of the industry for free-reign to innovate and explore. In particular, discussions will surround the ways that businesses on the blockchain may fit into the existing tax framework which companies operate under within the country.
Some traders are fearful that Thailand will adopt the significant individual trade taxes being levied on crypto-traders in other Asian countries. These taxes can be up to 30%, and some professionals speculate that the penalties could have drastic and markedly negative implications for an industry that is, in many ways, still in its infancy.
In fact, this tax could very likely result in Thai cryptocurrency companies leaving the country in order to run their businesses in neighboring countries with less strict guidelines and taxes for companies using the new technologies.
At the moment, the Thai regulators seem to be most interested in the prospect of a simple 15% capital gains tax on all earnings coming from cryptocurrencies. This amount is still under negotiation, and is consequently likely to be lowered as cryptocurrency professionals continue to argue their case to potential regulators.
Non-tax regulations are also on the discussion table for Thai negotiators this week. Specifically, taxation regulations and reporting requirements for corporations are being discussed.
The Thai Fintech Association is a cryptocurrency company concerned with protecting the interest of business on the blockchain. Their main prerogative in these current negotiations is to prevent the implementation of unnecessary or improper tax measures by the Thai government.
These talks will likely help to explain the direction in which Thailand will go, either soft or hard on cryptocurrencies.