Indonesia reportedly plans to impose a 0.1% tax on crypto investment profits from May 1 

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The government of Indonesia has reportedly planned to impose a 0.1% capital gain on digital assets investments and a value-added tax (VAT) on crypto transactions from May 1.

As per a report by Reuters, the spokesperson of Indonesia’s tax office, Hestu Yoga Saksama, said that the country would impose “income tax and tax” on digital assets “because they are a commodity” as defined by the Trade Ministry and “not a currency.”

The official also hinted at the government considering the process for such tax imposition, but the law passed after the pandemic laid the foundation for revenue collection on crypto transactions. Indonesia is still working on the implementation of taxes and regulations in the nation, he added.

The VAT rate on digital assets has been decided to be below the 11% levied on most goods and services, while the income tax on profits by investments, at 0.1% of gross transaction value, matches that on shares.

Crypto regulatory development in Indonesia

With multiple countries racing to launch their versions of digital currencies powered by blockchain, in December, Indonesia revealed its plans on CBDC with the aim to oust Bitcoin, as TheCoinRise reported.

Indonesia’s Commodity Futures Trading Regulatory Agency, or Bappebti, acknowledged a claim that crypto transactions in the country topped 83.8 trillion rupiah ($5.8 billion) in February 2022. Furthermore, from 11.2 million in 2021 to 12.4 million in 2022, the number of crypto holders climbed by more than 11%.

Even though it began warning its citizens about using digital assets for payments as early as 2014, Indonesian government officials had contemplated placing a tax on crypto transactions several times. In December 2020, the Bappebti recognized over 200 cryptocurrencies as commodities that may be legally exchanged, and in February 2021, it listed 13 exchanges as licensed crypto companies.

The Otoritas Jasa Keuangan (OJK), the county’s financial regulator, banned banks from trading crypto in January this year.

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