On Feb. 7, Reuters reported that the Thai Finance Ministry will waive corporate income tax and value-added tax for firms that conduct initial coin offerings (ICOs) for investment.
According to government spokespeople, companies will have access to alternative methods of raising capital through token issuance in addition to traditional methods.
The military-backed Thai government estimated that there will be around $3.7 billion worth of investment token offerings over the next two years, according to the report.
However, it noted that there would be a tax loss of around $1 billion by offering these incentives. Last year, the government scrapped plans to charge 7% VAT on crypto trading for exchanges and retail investors.
Conflicting Crypto Messages in Thailand
Cryptocurrency trading and adoption are popular in Thailand, however, there have been conflicting messages from the ruling elite.
Thailand’s tourism ministry has been trying to promote the place as crypto-friendly. However, the regime banned the use of crypto assets for payments last year, and its central bank has advocated for a wider crackdown.
The Thai SEC is preparing stricter rules for crypto trading and investment in line with action taken across the globe following the FTX collapse in November.
It remains to be seen whether companies issuing tokens eligible for these new tax breaks would have to register with the financial regulator and comply with its rules, but it is highly likely.
According to research from crypto tax software company Recap last month, Thailand’s capital Bangkok is emerging as a new crypto hub. However, without the clarity that Singapore and Hong Kong has, it may be tough to compete.
Industry analysts have suggested a tightening of regulations in Thailand may hinder its ability to become a regional crypto hub.
“Thailand is tightening its rules on the trading of crypto and advertising of digital assets, too. With stricter rules in place, it’ll be interesting to see whether this helps or hinders Bangkok’s place as a crypto hub in the coming months,” said Recap CEO Daniel Howitt last month.
Thailand’s largest crypto exchange, Bitkub, has around $29 million in current daily volume, according to CoinGecko.
Markets Retreat Again
Crypto markets are on the retreat once again, with total capitalization declining by 1% on the day to $1.06 trillion at the time of writing.
BTC had lost 1.4%, falling out of its four-day channel to trade at $22,000. Meanwhile, Ethereum was holding steady at $1,564, having lost just half a percent on the day.
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