Indonesia Looks to Reconsider Dual Crypto Taxation Policy

    Key Takeaways

    • Bappebti is looking to reassess the government-imposed VAT of 0.11% on each crypto transaction in the country
    • As per local media reports, Indonesia garnered around $2.49 million in cryptocurrency taxes in January.
    • Indonesia imposes a 0.1% income tax on capital gains from crypto investments.

    Indonesia’s Commodity Futures Trading Regulatory Agency (Bappebti) is pushing for a reconsideration of the country’s cryptocurrency taxation policies. Currently, Indonesia levies a 0.11% value-added tax (VAT) on each crypto transaction and imposes a 0.1% income tax on capital gains from crypto investments.

    Bappebti has taken the initiative to approach the Ministry of Finance, urging a review of these tax rates. The agency emphasizes the evolving role of cryptocurrencies in the national economy and suggests that the tax regime should adapt to this changing landscape.

    Tirta Karma Senjaya, from Bappebti, stressed the importance of conducting an annual review of crypto taxation laws, similar to other tax regulations in Indonesia. “As crypto is expected to join the financial sector by January 2025, we urge the Tax Director General to review these taxes. It’s been over a year since these rules were put in place, and taxes usually get checked every year,” Senjaya stated.

    He further explained that this request is due to crypto’s expected integration into Indonesia’s broader economy in the near future.

    Although these crypto taxes have been in effect for nearly two years, Senjaya stated that they should undergo an annual review, similar to other tax laws. “The evaluation is necessary because this regulation has been in place for more than a year. Typically, taxes undergo evaluation annually,” the report stated.

    Dwi Astuti, a spokesperson for the Ministry of Finance noted that they welcome input from Bappebti and the public” and that the issue of taxes will be discussed internally.

    The latest development comes amid the number of cryptocurrency holders in Indonesia seeing a significant surge, rising by more than 11% from 11.2 million in 2021 to 12.4 million in 2023. In January 2024, Indonesia collected approximately $2.49 million (Rp39.13 billion) in cryptocurrency taxes, reflecting the sector’s contribution to government revenue.

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