Indonesia’s cryptocurrency regulator, the Commodity Futures Trading Regulatory Agency (Bappebti), requested that the government reconsider crypto taxes. Indonesia treats crypto as commodities, and it is therefore subject to VAT and income tax.
Indonesia’s official cryptocurrency regulator, Bappebti, has urged the finance minister to reconsider the dual taxation of cryptocurrency. Cryptocurrencies are currently treated as commodities and are subjected to value-added tax (VAT) and income tax.
Regulators Call for Elimination of Dual Taxation
According to local reports, officials at Indonesia’s crypto regulator, Bappebti, have requested the finance minister reconsider the current tax rates for digital assets. Cryptocurrencies are currently treated as commodities in Indonesia, meaning they are subject to a government-imposed value-added tax of 0.11% on each transaction and a 0.1% income tax. The current taxation framework is expected to change when the country’s broader financial services regulator, the OJK, takes oversight of the crypto industry.
Tirta Karma Senjaya, head of the Bureau of Market Development at Bappebti, recently spoke at an event, saying:
“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.”
The Bappebti official further said the crypto and digital asset market is in its infancy and needs space to grow before it can significantly contribute to national revenue. Senjaya added that crypto would become an integral part of Indonesia’s broader economy in the future.
“Because later on, cryptocurrencies will become part of the financial sector, we expect a commitment from the Directorate General of Taxes to evaluate these taxes,” he said.
Existing Taxes Stifle the Industry
The crypto industry has repeatedly stated that existing taxes are burdensome for users and service providers, fearing they may stifle the industry. Local crypto exchanges blamed a drastic decline in trading volume in 2023 from 2022 on hefty taxes and argued it would drive users to foreign exchanges.
While the current crypto regulator has not detailed how it wants the Finance Ministry to revise the taxation frameworks, it likely expects VAT to be removed to place it on par with how stocks are treated. When oversight of the crypto industry is handed over to OJK, crypto could be treated as securities.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
