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The current income tax regulations apply to income received from NFT transactions and trading in it, according to Singapore Finance Minister Lawrence Wong.

The type and use of the NFT will affect Singapore’s income tax treatment.

NFTs should be taxed

According to a recent report by The Business Times, Singapore Finance Minister Lawrence Wong stated in a speech to parliament that income obtained from the non-fungible token (NFT) transactions or trading would be subject to the current income tax regulations. According to Wong, individuals receiving capital gains from NFT transactions will not be taxable in Singapore because the country lacks a capital tax structure.

The news comes from recent tax measures that many economists believe will help reduce inequality, reinforce the social compact, and facilitate longer-term expenditure.

Singapore’s “Tech-Neutral” NFT Policy

Singapore regulators had issued a warning to residents in January this year about making decisions about digital investment vehicles, particularly in the emerging sectors of NFTs and metaverse. Despite being hailed as Asia’s next crypto hotspot, Singapore has encouraged global regulators to tighten their grip on digital assets. It has revealed that the risks connected with technologies such as blockchain, decentralized finance, NFTs, and the metaverse have been thoroughly investigated.

Singapore’s central bank announced last month that it would not supervise the NFT market. In response to a query from the House of Commons about regulating NFT activity.

Shanmugaratnam disclosed that MAS has taken a “tech-neutral posture” and that it “looks through” the fundamental properties of the token to decide if it is to be regulated by the regulatory authority while urging users to exercise extreme caution. If an NFT possesses the features of a capital markets product under the Securities and Futures Act, it will be subject to MAS regulatory requirements (SFA).

Meanwhile, the MAS’s Managing Director, Ravi Menon, previously stated that the city-state has no plans to restrict Bitcoin and cryptocurrencies because they can play an important role in the digital future.

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