Thai Stock Exchange’s Chief Criticizes Regulators For Crippling Crypto Startups With Taxes
The governor of the Stock Exchange of Thailand (SET), Prinn Panitchpakdi, has recently criticized the government for taxing new crypto starts too much. According to him, new startups raising funds using Initial Coin Offerings (ICOs) os any kind of digital equity have to pay way more taxes than your average company.
He affirmed that ICO companies generally pay 7% of taxes in value-added (VAT) and that there is also 20% more in corporate tax. Companies like Google and Facebook, however, are exempt from taxes because of special deals made with the government.
This, the chief of the exchange affirms, can end up choking the startup ecosystem of the country as they simply have no ways of competing with these international companies. This way, these companies are simply unable to grow freely and to experiment because they are often attacked by such high taxes.
According to him, similar digital assets laws do not exist in Singapore. The government, by not creating this kind of law, lets the ecosystem flourish before they actually start taxing them, this way, they will grow more first. He also said that, in Singapore, private companies can freely use public data and that this helped to launch successful services like Grab Bus, which is illegal in Thailand.
He claimed that the tax system hurt even the local tourism companies since the local ones had to pay more taxes than the international ones like Booking and Agoda. This would end up limiting the local companies, he affirmed, as he asked why the largest companies are the ones receiving more benefits from the government.
The Drive To Attract Investments At The Same Time That Local Growth Is Allowed
Many developing countries face the same problem that Thailand already has. They want to attract investments from multinational companies but they also want local companies to be successful.
Multinational companies are often looking for the easiest countries to work, so they can as few taxes as possible and profit more. This often turns into a bargaining deal and countries like Thailand bend the rules for these outsiders.
The main problem created by this is that the companies end up being a problem for the local ones because they have several unfair advantages. It is often good for them but there an ongoing debate on whether this is actually good for the countries and the local markets, the ones that actually gave the companies these advantages in the first place.
Because of all this trouble, the burden is often on the startups. They have to pay more taxes while beginning their businesses, so it can be harder to survive this way. Sometimes even the survivors are actually acquired by other companies, which centralizes, even more, the economy in foreign actors.
Panitchpakdi believes that they need a system in which startups can really experiment and that Thailand will never a giant unicorn startup, the ones worth more than one billion USD if they simply keep curbing the development of their own companies.
This is an old question which has been discussed by decades, but it seems that the hour to start this discussion again in order to determine which the best to proceed is upon the governments of developing countries again now that the blockchain technology can be used to revolutionize businesses.