Preparations start for the next crypto boom in Singapore as the Inland Revenue Authority of Singapore (IRAS) plans to waive the Value Added Tax (VAT) on digitally traded tokens.
If things go as planned, the regulation is likely to be effective from the start of next year.
Although the plan is only in its proposal stage, the government is working closely with cryptocurrency-related organizations to understand the industry-wide implications if enacted into regulation.
The news comes following the proposal put forward by IRAS to exempt goods and services tax (GST) on cryptocurrencies last week.
What IRAS proposes
IRAS proposes that VAT is completely exempted when trading from fiat to cryptocurrency or any other digital payment tokens. The proposal would apply to all digital currencies such as Bitcoin, Litecoin, Ethereum, Ripple, XRP or Monero. Stablecoins, however, are excluded from the tax structure reform.
Singapore’s recent attempts in relaxing the norms for digital currencies are being viewed from the perspective of positioning itself on the top of the technological innovation curve.
Having seen an increased number of investments in the sector and the money being poured into its economy post the US-China trade war, Singapore is leading the way for cryptocurrency advancements in the region.
Singapore moving towards a digital economy
Chan Chun Sing, a prominent face in Singaporean politics, confirms that the country is making every effort possible to digitize the economy, given the high labor and land costs involved. Thus, a high degree of quality assurance coupled with reliability and transparency is imperative at this stage of development.
Crypto investors around the globe have been wary of complex crypto regulations and have often complained about the exorbitant tax rates on crypto-to-crypto transactions.
With Singapore pulling out all the stops to align its tax codes with other crypto-friendly nations such as Canada or Germany, it is likely to become the most preferred destination for cryptocurrency investments in the future.
