Bangkok Post

Draft decree on digital assets approved

- CHATRUDEE THEPARAT WICHIT CHANTANUSO­RNSIRI Additional reporting by Nuntawun Polkuamdee

The cabinet approved a draft of a royal decree yesterday to regulate digital-assetrelat­ed transactio­ns endorsed by the Council of State.

Finance Minister Apisak Tantivoraw­ong said the Council of State has not modified the essence of the draft proposed by the Finance Ministry, which the cabinet approved in principle on March 13, but narrowed the definition of digital assets to cryptocurr­encies and digital tokens, removing other assets such as electronic data, as specified by the ministry in the previous draft.

Mr Apisak said the next step is publicatio­n in the Royal Gazette the decree can be enforced.

He said the new law to comprehens­ively regulate cryptocurr­encies and digital tokens is necessary to prevent money laundering, tax avoidance and crime.

The new law is not meant to prohibit cryptocurr­encies, initial coin offerings (ICOs) and other digital asset-related transactio­ns, but to protect investors, said Mr Apisak.

He said the Finance Ministry and the before Securities and Exchange Commission (SEC) are working on organic laws that require all digital asset transactio­ns, including those of digital asset exchanges, brokers and dealers, to be registered with the relevant authoritie­s. Meanwhile, Deputy Finance Minister Wisut Srisuphan said the tax collection structure for investors who make digital-assetrelat­ed trades will remain unchanged, allowing the taxcollect­ing agency to impose levies on digital assets, as earlier approved by the cabinet.

Investors who make digital-asset-related trades will be liable for a 7% value-added tax (VAT) payment, on top of the 15% withholdin­g tax on capital gains and returns from such investment­s, when the new law is enforced.

Retail investors will be exempt from paying the VAT if they trade digital assets through exchanges.

But investors will be required to pay VAT if their trades produce no capital gains, said Mr Wisut.

Finance Permanent Secretary Somchai Sujjapongs­e said the laws regulating digital assets, including cryptocurr­encies, are a step in the right direction, adding several countries have greater awareness of the problems associated with them.

The government does not plan to promote cryptocurr­encies, but rather wants to support blockchain technology since it is has many benefits, said Mr Somchai.

The planned tax imposed on investment in digital assets would be appropriat­e and impartial, he said.

But some have criticised the digital asset tax.

Korn Chatikavan­ij, chairman of the Thai Fintech Associatio­n, said the move would hinder the growth of domestic startups as they will register their businesses overseas to avoid the levy.

If ICOs cannot be developed in Thailand, then it is not a problem for ICO issuers because they can embark on ICO offerings in Singapore, even if the funding cost is higher there than in Thailand, he said.

“Singapore is a good location to raise funds from ICOs as it waives the capital gains tax, so the market environmen­t supports the registrati­on of ICOs with good prospects there,” said Mr Korn.

“Who are the beneficiar­ies from Thailand’s current rules and regulation­s on crypto-assets? I don’t see [anyone benefiting] from the current situation.”

 ??  ?? Apisak: Definition of assets narrowed
Apisak: Definition of assets narrowed

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