Traders in Singapore will have to pay appropriate taxes for profiting through trading or selling their NFTs.
Often called the Southeast Asian crypto hub, Singapore has been at the forefront of blockchain technologies and foreign investments in the region. However, the government seeks better control over the digital asset industry.
Based on the report by The Business Times, Finance Minister of Singapore Lawrence Wong will be imposing tax rules that will shave off some of the profits that NFT traders and sellers receive.
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While the news is not particularly in favor of new traders looking to invest in NFTs, Wong stated that capital gains from non-fungible token transactions will not be taxed as there is no proper framework for that.
The question of whether NFTs should be regulated in Singapore was raised back in February. However, the Senior Minister of the Monetary Authority of Singapore Tharman Shanmugaratnam argued that NFTs shouldn’t be regulated, arguing that they "cannot possibly regulate all things or products that people choose to invest their money in."
He added that Singapore’s Monetary Authority would only get involved in regulating NFTs if they meet certain conditions:
"MAS takes a tech-neutral stance and “looks through” to the underlying characteristics of the token to determine if it is to be regulated by MAS. Should an NFT have the characteristics of a capital markets product under the Securities and Futures Act (SFA), it will be subject to MAS’ regulatory requirements."
Singapore has seen immense success over the past few years, with a recent analysis published by the KPMG showing that the country had secured almost $4B worth of blockchain FinTech deals in 2021.