Indonesia Urges Tax Reassessment Amid Crypto Industry Growth

The Commodity Futures Trading Regulatory Agency (Bappebti) of Indonesia is seeking a reassessment of the nation’s cryptocurrency taxation policies, urging the Ministry of Finance to reevaluate the 0.11% value-added tax (VAT) on each crypto transaction and the 0.1% income tax on crypto.

As reported earlier by TheCoinRise, the blockchain and metaverse executive of Indonesia, Tuhu Nugraha, confirmed that the nation wants to embark on trials of blockchain technology for various public service applications.

Mulling Over Crypto Tax

Executive staff members at Bappebti believe it is essential to review these taxes, considering the growing significance of cryptocurrencies in Indonesia’s expanding economy, as per a report.

Tirta Karma Senjaya, Head of the Bureau of Market Development and Development at Bappebti, emphasized the need for commitment from the Directorate General of Taxes, stating,

“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.”

Revenue from Crypto Tax

The report highlighted that the total government revenue from crypto taxes in Indonesia amounted to approximately $2.49 million in January alone. Interestingly, the country also debuted the nation’s long-awaited crypto exchange, which began to operate. 

Despite these taxes being in effect for almost two years, Senjaya argued that they should undergo an annual review, aligning with standard practices for tax laws.

Crypto Tax in Indonesia

The initial implementation of the 0.1% capital gains tax on crypto investments and the 0.11% VAT tax occurred in April 2022. Indonesia justified these measures by categorizing crypto as a “commodity as defined by the Trade Ministry” rather than a traditional currency.

In a move signaling the growing importance of the crypto industry in Indonesia, Gibran Rakabuming Raka, the vice presidential candidate who recently won the presidential election, expressed plans to focus on providing opportunities in the crypto and blockchain space for the younger population.

Crypto Holders Surging in Indonesia

The number of crypto holders in Indonesia has witnessed a significant uptick, surging by more than 11% from 11.2 million in 2021 to 12.4 million in 2023. This increase underscores the mainstream adoption and interest in cryptocurrencies among the Indonesian population.

As Indonesia grapples with the evolving landscape of the crypto industry and the potential integration of digital assets into the broader financial sector, the call for a tax reassessment reflects the need for a flexible regulatory framework that fosters growth while ensuring fair and reasonable taxation.