The Indonesian cryptocurrency regulatory body has urged the Finance Ministry to reconsider the current ‘dual taxation’ policy on crypto transactions in the country.
In Indonesia, cryptocurrencies are treated as commodities and are subject to a 0.11% value-added tax and a 0.1% income tax.
Officials from Indonesia’s Commodity Futures Trading Supervisory Agency (Bappebti) argued last week that the imposition of double taxation on crypto transactions needs to be reevaluated.
Tirta Karma Senjaya, the head of Bappebti, indicated that the classification of cryptocurrencies as commodities might change by 2025. This potential shift is because the oversight of crypto will transition from Bappebti to the financial services authority OJK.
Senjaya emphasized during an event in Jakarta that the crypto industry and its regulations are still in their nascent stages. Therefore, he suggested providing the industry with room to develop until it can make a significant contribution to national revenue.
He urged the Tax Director General to review the current tax regulations, pointing out that it has been over a year since these rules were implemented, and tax policies are typically reviewed annually.
Since its implementation in April 2022, the current tax structure for cryptocurrencies has proven lucrative, with January 2024 alone generating approximately $2.49 million in revenue. According to reports, Indonesia saw a total revenue of $41.2 million from crypto taxes in the previous year.
In response to Bappebti’s request to reassess the implementation of crypto taxes, Dwi Astuti, a spokesperson for the Ministry of Finance, assured that the Ministry would consider input from both industry stakeholders and the public.
“We welcome input from Bappebti and the community. It will certainly be deliberated internally,” Astuti stated during a media briefing.
Indonesia’s Crypto Tax Revenue Plummeted
In 2023, the country experienced a sharp 63% drop in crypto tax revenue compared to the previous year, despite Bitcoin’s remarkable surge of approximately 160% during that period.
Local cryptocurrency exchanges attributed the significant decline in trading volume throughout 2023 to the hefty taxes imposed. They argued that such taxes would likely drive users to opt for foreign exchanges instead.
In December, Hasan Fawzi from the Ministry of Finance highlighted the downward trend in the value of crypto asset transactions throughout 2023. However, he noted that the number of crypto asset customers continued to rise, reaching a total of 18.06 million users by the end of the year.
