In a bid to stimulate the growth of domestic crypto market, the Indonesian Commodity Futures Trading Regulatory Agency (Bappebti) is considering a tax evaluation that would require investors to bear only half of the current tax burden.
Tirta Karma Senjaya, Head of the Development and Enhancement Bureau at Bappebti, highlighted the need for a reassessment of the existing tax regulations to reduce costs for crypto investors, making the Indonesian market more attractive.
Senjaya emphasized the importance of a collaborative effort among stakeholders, including Bappebti, the Financial Services Authority (OJK), the Directorate General of Taxes at the Ministry of Finance, crypto traders associations, and market participants, to ensure that the tax imposition aligns with the expectations of all parties.
The current tax structure has contributed significantly to state revenue, generating over IDR 259 billion (US$16.5 million) and accounting for more than 50 percent of the income in the fintech industry.
However, concerns have been raised about the high taxes imposed on crypto transactions, leading some investors to opt for foreign markets.
Asih Kerniangsih, Executive Director of the Indonesian Crypto Asset Traders Association (Asparkrindo), mentioned that the excessive taxes have prompted many crypto market participants to conduct transactions abroad, impacting the competitiveness of Indonesia’s crypto exchanges.
Oscar Darmawan, CEO of Indodax, noted the various taxes applied to crypto assets in Indonesia, including a 0.10 percent Income Tax (PPh), 0.11 percent Value Added Tax (PPN), and an additional 0.02percent for exchange, deposit, and clearing fees.
Darmawan suggested that removing PPN and maintaining only PPh would enhance the competitiveness of the domestic crypto market.
The Directorate General of Taxes at the Ministry of Finance defended the current tax structure, stating that the government has applied low tariffs to attract crypto exchanges to operate within Indonesia.
Since May 2022, each crypto transaction in Indonesia incurs a 0.11 percent PPN on Bappebti-registered exchanges, along with a 0.10 percent PPh.
Dwi Astuti, Director of Outreach, Service, and Public Relations at the Directorate General of Taxes, highlighted the low tariffs as an incentive for local crypto exchanges.
She emphasized the government’s efforts to strike a balance between generating revenue and maintaining an attractive environment for crypto businesses.
As of the end of January 2024, the government has collected IDR 39.13 billion in revenue from crypto taxes, with IDR 18.2 billion coming from PPh Article 22 and IDR 20 billion from PPN on crypto transactions.
