Opposition Mounts to Crippling Crypto Tax in Thailand

Opposition from both sides of the political divide is mounting in Thailand over the revenue department’s proposed 15% capital gains tax on crypto trading profits.

Earlier this month, Thailand’s revenue department announced that it would be imposing a 15% capital gains tax on crypto trading and mining profits. The government is expected to finalize details and dispel some of the confusion that has mounted for local crypto businesses on Jan 20.

While clarity and regulations for the industry are welcomed by most, there has been growing opposition to the new tax which some politicians say could hurt the country.

Thailand’s military-backed government is facing major economic woes following a lockdown that has lasted for almost two years, crippling thousands of small businesses, many of which rely on tourism. Imposing new taxes is one way for it to claw back some of the expenses that covid stimulus packages have created. A new tourist tax is also due to come into effect in April.

‘Income opportunity for the new generation

Korn Chatikavanij, the leader of the Kla Party, is one politician that is opposed to the new crypto tax. According to local media, he stated that all profitable transactions would be subject to the 15% tax, and calculating income will become a complex procedure. He commented that “the Revenue Department is collecting VAT like crypto is a product,” before adding:

“Therefore, there will be a double VAT payment on cryptocurrency transactions where you have to pay the VAT when selling the product and paying another VAT from selling crypto in baht,”

Other political parties have also voiced their disapproval with opposition Pheu Thai Party’s registrar Jakkapong Sangmanee stating that crypto traders have already paid personal income taxes so an additional tax will hurt retail investors but benefit institutional ones leading to more inequality. Thailand has one of the largest wealth gaps in the world according to Credit Suisse.

Leader of the Thai Sang Thai Party, Sudarat Keyuraphan, added that the government has a lack of vision in trying to tax crypto in a country attempting to promote digital assets. “This will block an income opportunity for the new generation,” she added.

Anti-crypto sentiment brewing at the bank

Thailand has seen an explosion in crypto trading during the 2021 bull market. Traditional stock investing has largely been limited to wealthy institutional investors, but crypto has been available to all.

The central bank is vehemently against decentralized digital assets despite a number of retail banks making large investments in local crypto exchanges recently. It is planning a “red-lines” for crypto report this month in which it is expected to clamp down further on the fledgling industry.

Last year, the Bank of Thailand repeatedly warned high street banks and businesses against accepting crypto as payments claiming that it would hurt the already battered economy.