- Thai Cabinet decided to provide tax benefits for businesses that issue digital tokens.
- The exemption covers both the main and secondary markets for ICOs issued.
On Tuesday, the Thai government announced that it will exclude businesses that issue digital tokens for investment from paying corporate income tax and value-added tax. After easing tax laws for crypto trading last year, Thailand has taken yet another positive step toward the cryptocurrency sector.
According to Reuters, on March 7 the Thai Cabinet decided to provide tax benefits for businesses that issue digital tokens for investment purposes. Deputy Government Spokesperson Rachada Dhnadirek said that the enterprises will use investment tokens and other means, like debentures, to obtain funds.
Boosting Crypto Expansion
In a statement, Finance Minister Arkhom Termpittayapaisith stated the exemption covers both the main and secondary markets for ICOs issued by corporations and registered organizations. Also, there will be a VAT exemption for investors, albeit this does not apply to utility tokens.
During the next two years, analysts predict that investment token sales will raise about $3.71 billion. The decision will result in a loss of approximately $1 billion in tax income for the government.
Cryptocurrency use in Thailand has increased steadily in recent years, even after the Securities Exchange Commission of Thailand began issuing guidelines for the industry. Last year, the government also relaxed tax regulations on crypto trading in an effort to foster the sector’s expansion.
To counteract this, the Bank of Thailand and other Thai authorities have placed limits on the use of digital assets for payments and other crypto services. The central bank says this threatens the country’s financial stability and economy.
As a potential cornerstone of tomorrow’s banking and financial system, the government is also experimenting with central bank digital currency (CBDC).