Thailand’s Finance Ministry has announced that it will waive corporate income tax and value-added tax for companies conducting initial coin offerings (ICOs) for investment.
This move is part of the military-backed government’s plan to provide alternative methods of raising capital through token issuance, in addition to traditional methods.
According to reports, the government estimates that there will be approximately $3.7 billion worth of investment token offerings over the next two years. However, this will result in a tax loss of around $1 billion, a cost the government is willing to bear.
Despite these tax incentives, there have been conflicting messages from the Thai government regarding the cryptocurrency industry. While the tourism ministry is promoting the country as crypto-friendly, the regime has banned the use of crypto assets for payments, and its central bank is advocating for a wider crackdown.
The Thai Securities and Exchange Commission (SEC) is also preparing stricter rules for crypto trading and investment, which may require companies issuing tokens eligible for tax breaks to register with the financial regulator and comply with its rules.
Industry analysts have expressed concern that the tightening of regulations in Thailand may hinder its ability to become a regional crypto hub, especially since there is still a lack of clarity compared to Singapore and Hong Kong.
Thailand’s largest crypto exchange, Bitkub, currently has around $29 million in daily volume, according to CoinGecko.
Meanwhile, the crypto markets are on the retreat once again, with total capitalization declining by 1% on the day to $1.06 trillion. Bitcoin (BTC) has lost 1.4% and is trading at $22,000, while Ethereum is holding steady at $1,564, having lost just half a percent on the day.
As the Thai government continues to provide tax incentives for the crypto industry, it remains to be seen whether the conflicting messages will hinder or help its development.