Thai stock exchange chief warns of securities transaction tax

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A proposed securities transaction tax in Thailand will depress trade and hurt the development of the Bangkok stock exchange, said Pakorn Peetathawatchai, chairman of the market.

The Thai government said it plans to levy taxes on trading stocks and cryptocurrencies, after trading and mining them mushroomed in the largely unregulated environment of the country.

“I think it would definitely have an impact on the market, especially on the liquidity side, as trading volume would be affected by higher transaction costs,” Pakorn said of the transaction tax proposal. 0.1% in an interview with the Financial Times.

Thailand proposed the tax as the country continues to struggle to revive growth, with the tourism sector reeling from the impact of the coronavirus pandemic.

Pakorn said the Stock Exchange of Thailand has questioned the government about the amount of the planned tax, the time frame given to companies to comply and whether exchange-traded funds would be subject to the tax in addition to individual stocks.

“Our market has been thriving for quite some time and is becoming one of the most significant markets in Asia and even the world,” Pakorn said. “But once this tax is released, it will be a readjustment again.”

The Thai government is also considering imposing a flat 15% withholding tax on all cryptocurrency transactions, but has faced pushback from the fledgling industry.

Pakorn said the Bangkok exchange plans to launch a digital asset exchange with the aim of opening trading in the second quarter of the year, pending approval of an operating license by the Securities and Exchange. Country Committee.

The market, called Thai Digital Asset Exchange, or TDX, would initially trade in investment tokens, which are digital securities for an underlying asset, rather than cryptocurrencies such as bitcoin or ether.

“We would like to provide a shelf for the asset class so that the retail investor can start diversifying their investments into a smaller amount,” Pakorn said.

Thailand’s economy, which depends on tourism, has been hit hard by the pandemic, straining the public budget.

But cryptocurrency mining and trading has provided a rare source of growth. Thailand now has one of Southeast Asia’s largest markets for digital currencies, according to CryptoCompare, an aggregator that tracks the market.

Interest has been sparked in part by the depreciation of the Thai baht, which lost 10% of its value against the dollar last year. “This makes the crypto value proposition more attractive as it protects against a loss of purchasing power in the Thai baht,” said David Moreno Darocas, research analyst at CryptoCompare.

The surge in market activity caught regulators off guard, but companies quickly entered the sector.

Sansiri, the Bangkok-listed real estate group, launched one of Thailand’s first SEC-approved digital tokens, SiriHub Token, backed by revenue streams from its real estate projects last year.

Bitkub Capital Group, Thailand’s largest digital asset exchange, reached a valuation of over $1 billion in 2021 after entering into a joint venture in November with SCBx Group, one of the oldest commercial banks from the country. SCB took a 51% stake in the exchange for $537 million.

Twitter: @JohnReedwrites

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