THE Ministry of Finance is holding firm against efforts for a draft bill on the regulation of digital currencies to be watered down, especially with the imposition of a 15 per cent withholding tax on transactions.
The ministry said the draft bill had been passed by the Council of State and it rejected suggestions that the emerging cryptocurrencies sector was deserving of supportive government policies.
Prasong Poontaneat, revenue director-general, was responding to a letter from the Thai Blockchain Association that had been submitted to Deputy Prime Minister Somkid Jatusripitak.
The letter requested that the government revise the draft bill, particularly on the withholding tax of 15 per cent.
Prasong said that during a recent discussion between the association and the ministry, Finance Minister Apisak Tantivorawong insisted that officials proceed with enforcement of the bill and the collection of the withholding tax as specified.
According to Prasong, the draft emergency decree on digital asset business and draft amendment of the revenue code are going through the process for the announcement of their legal enforcement. The regulations are aimed at protecting retail investors who otherwise may fall victim to fraudsters, Prasong said, as digital currencies are not legally accepted in many countries, including Thailand.
“We are launching the laws to prevent any possible damage to people and the possibilities for money laundering,” he said. “The draft law requires the identity of digital currency issuers to be declared and they will have to deduct tax and send it to Revenue Department,” he said.
In regard to the Thai Blockchain Association’s contention that Singapore provides more tax privileges than Thailand, Prasong said that the draft law does not purport to support investment in digital currencies. Given this stance, the withholding tax has been set at 15 per cent, as this is a similar rate to the tax levied on deposits in Thailand.
An anonymous source from the Ministry of Finance said that once the bill comes into force, the Securities and Exchange Commission (SEC) will introduce its organic laws or regulations, such as permissions for licences, to regulate digital currencies as well as their underwriters. For example, companies which operate digital asset businesses must inform the SEC within 90 days.