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Thailand, Malaysia, Laos make inroads into crypto

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A picture taken on February 6, 2018 shows a visual representation of the digital crypto-currency Bitcoin. AFP

Thailand, Malaysia, Laos make inroads into crypto

Taxes on cryptocurrency trading should be fair, clear, practical and promote trade, the Thai Security and Exchange Commission’s former deputy secretary-general Tipsuda Thavaramara said on January 16.

The Revenue Department’s decision to discuss taxes for cryptocurrency trading with relevant agencies was a good move, she added.

Tipsuda also pointed out the three issues related to taxing cryptocurrency trading that are questionable, in the areas of capital gains tax, value-added tax (VAT) and tax on issuing tokens.

First, the department’s decision to collect capital gains tax is unfair and unpractical as digital asset exchange operators do not pay investment returns to customers. Withholding tax also affects transactions as stores that accept cryptocurrencies must collect capital gains tax from customers.

Second, the department considers cryptocurrency a product, so businesses and traders are required to pay VAT for selling cryptocurrency. Many other countries, like Australia, Singapore and some European nations, have waived this tax for the sale of cryptocurrencies.

And third, the tax on the issuance of debentures should not apply to the issuing of investment tokens. The department says all issuances are considered as income unless exemption is announced.

“Whether policies focus on the promotion of trade industry or not, the Revenue Department should collect taxes fairly under clear rules and practises,” Tipsuda said.

Neighbouring Malaysia is assessing the potential benefits of adopting a digital currency, the country’s central bank said.

Bank Negara “is actively assessing the value proposition of central bank digital currency [CBDC] to Malaysia”, it said in an emailed response to a query from Bloomberg.

“While a decision has not been made to issue CBDC, we have focused our research on CBDC via proof-of-concept and experimentation to enhance our technical and policy capabilities, should the need to issue CBDC arise in the future,” it said.

And over in Laos, the Joint Development Bank (JDB) on January 14 held a ceremony to announce that Bitqik Co Ltd had been given approval in-principle to hold a Crypto Exchange Business Licence after an agreement in-principle had been granted for a cryptocurrencies exchange platform by the Bank of the Lao PDR (BoL), the central bank.

The ceremony took place at the JDB headquarters in the capital Vientiane and was attended by BoL governor Sonexay Sithphaxay, JDB board chairman Ekaphanh Phapithack, representatives of government bodies and the management boards of JDB, Bitqik Co Ltd and SMG Group Sole Co Ltd.

BoL Payment Systems Department director-general Soulysak Thamnuvong reported the results of research and selection at the ceremony, on behalf of the research committee.

He noted that more than 30 businesses had submitted proposals to launch cryptocurrency trading services.

With due consideration of the terms of cryptocurrencies trading trials, only two licensed crypto exchange platforms were given authority to operate in Laos, namely Bitqik Co Ltd, under SMG Group Sole Co Ltd and JDB, while the second is a joint venture between the AIF Group and the Phongsubthavy Group.

Speaking at the ceremony, JDB’s Ekaphanh underscored that setting up a company to provide cryptocurrency trading services is an opportunity to attract money into Laos, contribute to the country’s development, and pay profit tax to the government, which he described as turning crisis into advantage.

The BoL’s Sonexay said that proper action must be taken to operate in accordance with the rules and conditions set by the government.

This is a new step by Lao investors to establish a cryptocurrency trading platform legally, under audit and management from the government, to ensure that investors are not at risk of being lied to.

It also enables people to invest with confidence in ways that the kip and other currencies, using a crypto platform via the banking system, can be conveniently traded in the very near future.



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