Political parties from both sides of the political divide are coming out against the government’s proposed cryptocurrency tax.
The Revenue Department said on Monday that they will be able to finalise the details of the tax on profits from cryptocurrency and digital asset trading within January.
If passed into law, the government will be able to introduce a 15 per cent withholding tax on cryptocurrency profits which will affect miners, dealers and investors. Sellers will have to record all profitable transactions to find out which ones require withholding tax.
“I disagree with the Revenue Department on collecting this tax until there is further clarification on issues of concern,” Korn Chatikavanij, the leader of the Kla Party, wrote on his social media page on Wednesday.
Korn said the tax would mean that all profitable transactions, not the losses, will be subject to 15 per cent withholding tax. At the same time, these profits will have to be combined with other income to calculate for the annual tax filing.
But there is also the value added tax (VAT).
“The Revenue Department is collecting VAT like crypto is a product,” he said.
“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,” he said.
The Pheu Thai Party and the Thai Sang Thai have also voiced their concerns over the proposed tax.
Pheu Thai Party’s registrar Jakkapong Sangmanee said last week that people who buy and sell cryptocurrency already have to pay a personal income tax so the introduction of another tax on top of that will hurt retail investors but institutional investors will benefit from it.
“It will lead to even more inequality,” he said.
Leader of the Thai Sang Thai Party Sudarat Keyuraphan said on Tuesday the government’s lack of vision is at play as they do not see the opportunity of raised income for the country from promoting digital assets.
“This will block an income opportunity for the new generation,” she said.
“There is nothing wrong with a policy to collect tax on profits from digital assets, as long as it is fair and does not take advantage of taxpayers,” she said.
Korn said if the bill becomes law, cryptocurrency sellers will have to pay VAT without being able to write a receipt because the currency is being traded on exchanges where the buyers is unknown.
This is why many countries are amending their laws to take cryptocurrency transactions out of the VAT system, he said.
For example, Singapore, Australia and some countries in the European Union do not impose VAT on cryptocurrency transactions.