On February 7, Reuters reported that Thailand’s finance ministry will waive corporate and value-added tax for companies conducting initial coin offerings (ICOs) for investments.
According to government spokespersons, companies will have access to alternative methods of raising capital through token issuance in addition to traditional methods.
Thailand’s military-backed government estimated that about $3.7 billion worth of investment coins will be offered over the next two years, the report said.
However, it noted that there would be a tax loss of about $1 billion from offering these incentives. Last year, the government scrapped plans to levy a 7% VAT on crypto trading for exchanges and retail investors.
Conflicting crypto messages in Thailand
Cryptocurrency trading and adoption are popular in Thailand, but there are conflicting reports from the ruling elite.
Thailand’s tourism ministry has been trying to promote the place as crypto-friendly. However, the regime banned the use of crypto-assets for payments last year and the central bank has been calling for a broader crackdown.
The Thai SEC is preparing stricter rules for crypto trading and investment in line with the measures taken around the world after the collapse of the FTX in November.
It remains to be seen whether companies issuing tokens eligible for these new tax breaks will need to register with the financial regulator and comply with the rules, but it is very likely.
According to research from crypto tax software company Recap last month, Thailand’s capital, Bangkok, is emerging as a new crypto hub. Without the clarity that Singapore and Hong Kong have, it can be difficult to compete.
Industry analysts have suggested that tightening regulations in Thailand could hinder its ability to become a regional crypto hub.
Thailand is also tightening its rules on crypto trading and digital asset advertising. With stricter regulations, it will be interesting to see if this helps or hinders Bangkok’s position as a crypto hub in the coming months,” Recap CEO Daniel Howitt said last month.
Thailand’s largest crypto exchange, Bitkub, currently has a daily volume of around $29 million, according to CoinGecko.
Markets are retreating
Crypto markets are once again pulling back with total capitalization falling 1% on the day to $1.06 trillion at the time of writing.
BTC had lost 1.4% and fell out of its four-day channel to trade at $22,000. Meanwhile, Ethereum held steady at $1,564, having lost just half a percent on the day.
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