Indonesia to impose 0.1% crypto tax from May: report

The Indonesian government is reportedly planning to impose a 0.1% capital gains tax on crypto investments from May 1, as well as a value-added tax or VAT on transactions involving digital assets.

According to a Friday report from Reuters, Hestu Yoga Saksama, a spokesman for the Indonesian tax office, said: said the country will impose “income tax and VAT” on crypto assets “because they are a commodity as defined by the Ministry of Commerce” and “not a currency”. The government is reportedly still considering how to introduce such taxes, but legislation passed in response to the pandemic has laid the groundwork for collecting revenue from cryptocurrency transactions.

Indonesia’s Commodity Futures Trading Regulatory Agency, also known as Bappebti, confirmed a report that in February 2022 crypto transactions in the country reached 83.8 trillion rupiah – about $5.8 billion. In addition, the number of crypto holders increased by more than 11%, from 11.2 million in 2021 to 12.4 million.

CoinTelegraph reported that Indonesian government officials had often considered levying a tax on crypto transactions, even though it had begun warning its citizens on using digital assets for payments as early as 2014. The Bappebti recognized more than 200 cryptocurrencies as commodities that could be legally traded in December 2020, and listed 13 exchanges as licensed crypto companies in February 2021.

Related: Indonesian Crypto Industry in 2021: A Kaleidoscope

While the Indonesian government may be preparing to set up a legal framework for cryptocurrencies, culture appears to be a factor in mainstream adoption. In November, the National Ulema Council, a group of Islamic scholars – about 87% of the Indonesian population, identifies as a Muslim – said crypto as a transaction tool was prohibited under the religious laws. While the council’s rulings could reportedly be a source of “legislative inspiration”, they are not legally binding in Indonesia.

Leave a Comment