Thailand has proposed tax breaks for companies that issue certain digital assets. The move is aimed at attracting new businesses and promoting economic growth in the web3 industry.
Indeed, Thailand agreed Tuesday to exempt companies issuing digital tokens for investment purposes from corporate income tax and value-added tax, a government spokeswoman said.
The government estimates that the supply of investment tokens over the next two years could reach 128 billion baht (3.46 billion euros), the spokeswoman said, noting that the tax shortfall for the government would then amount to 35 billion baht.
This measure is in addition to the abolition of the value added tax (7%) that these companies had to pay. This tax giveaway by the government is expected to amount to a revenue shortfall of 35 billion baht, or about $1 billion.
Cryptos have gained popularity in Thailand in recent years after the country’s Securities and Exchange Commission began regulating digital assets.
Last year, the government already relaxed tax rules on crypto trading to promote the development of the sector.
This will give companies access to alternative ways of raising capital that will complement traditional methods like debentures, Rachada Dhnadirek told reporters at a press conference.
Indeed, blockchain technologies and cryptocurrencies are becoming increasingly popular in Thailand. The country has taken steps to control the market and foster innovation, including the launch of Thai Baht Digital (TBD). This is a national cryptocurrency, and its creation was followed by tax breaks for security tokens. However, the issue of taxes on cryptos is gaining momentum as the sector grows.
The adoption of these new measures is thus part of the same overall policy line: that of promoting the digital asset sector.