On Tuesday the Financial Times reported that Thailand would not be going forward with a 15% capital gains tax on cryptocurrencies. Thailand’s lawmakers announced their intent to impose the tax earlier this year, signaling that both traders and miners would need to adhere to the new rule. This move was met with strong opposition from both politicians and members of the country’s growing cryptocurrency community.
Thailand’s lawmakers and central bank officials - like those in many other countries - have spent the last several months exploring potential regulatory frameworks for the cryptocurrency industry. In December of 2021, a senior director of the central bank expressed concerns about price volatility and consumer risks involved in trading cryptocurrencies, saying “we don’t want banks to be directly involved in digital asset trading because banks are (responsible) for customer deposits and the public and there is a risk.” Another senior director claimed that allowing companies to accept cryptocurrency payments would “impact the central bank’s ability to oversee the economy.”
The capital gains tax received heavy pushback from lawmakers across multiple political parties. Sudarat Keyuraphan, the leader of the Thai Sang Thai Party, claimed that the tax was representative of the government’s lack of vision. Jakkapong Sangmanee, registrar of the Pheu Thai Party, expressed concerns that the 15% capital gains tax would hurt retail investors but help large institutions, leading to a wider wealth gap in the country. The Tourism Authority of Thailand (TAT) worried that a capital gains tax might deter tourists. TAT Governor Yuthasak Supasorn said “Crypto is the future, so we must make Thailand a crypto-positive society to welcome this group of quality tourists.” These concerns were enough to convince the government to drop the proposed tax.
Regulatory debates over cryptocurrencies have broken out in countries across the world. In January the central bank of Russia proposed a blanket ban on cryptocurrency use and mining but received pushback from Russian president Vladimir Putin, who encouraged lawmakers to explore potential regulatory strategies instead. A similar scenario is unfolding in India, where they are moving forward with a 30% tax on cryptocurrencies rather than an outright ban. In the U.S., the Biden administration is preparing an executive order calling for a comprehensive regulatory strategy on the cryptocurrency industry.