This week, the Thai government canceled plans to impose a 15% tax on all crypto transactions. The decision comes after backlash from some of Southeast Asia’s top traders.
Why did the Thai government want to restrict crypto payments?
Amazingly, Thailand has one of the fastest growing crypto markets in the world. Over the past two years, the country has been heavily impacted financially due to pandemic-related restrictions. During this time, the crypto market has grown astronomically!
Of course, this change drew the attention of state officials to the new market. According to Pete Peeradej Tanruangporn, Managing Director of Upbit, the revenue department took a respectful approach:
“The revenue department did a lot of homework and also reached out to crypto operators for feedback. It’s much more investor and industry friendly.
Last week, however, the Bank of Thailand revealed plans to restrict cryptocurrency payments. As a result, their main reason is that paying with crypto “would (usually) not bring much benefit to consumers and businesses.”
Some members of the crypto community were quick to criticize the decision. For example, the policy director of Elliptic, a crypto analytics firm, David Carlisle, believes that all merchants can safely accept crypto payments with “appropriate safeguards in place.”
Taxation and regulation of crypto around the world
Although the crypto market has grown at the speed of light in 2021, many states have already started taxing and regulating digital currencies. For example, Indonesia has banned crypto trading as far as financial institutions are concerned.
Additionally, Singapore has called digital assets “not suitable for the general public”. The Monetary Authority of Singapore has also issued new guidelines restricting cryptocurrency trading.
Surprisingly, India has also taken a big step in recognizing cryptocurrencies. However, this is not necessarily good news. The country now imposes a 30% tax on any revenue generated from crypto transfers – including NFTs. Finance Minister Nirmala Sitharaman also confirms an additional tax deduction of 1% at source.
Currently, crypto is completely banned in 8 countries, including Egypt, Qatar, Iraq, Morocco, Oman, Tunisia, Algeria, and Bangladesh. China was the first country to ban crypto transactions in September 2021. The move forced China-based retail giant Alibaba to stop selling cryptocurrency mining machines.
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