Key Points
- The Commodity Futures Trading Supervisory Agency (Bappebti) of Indonesia has called for a reevaluation of cryptocurrency taxation.
- Indonesia experienced a 62% drop in crypto tax revenue in 2023 despite a surge in Bitcoin’s value.
The Indonesian Commodity Futures Trading Supervisory Agency (Bappebti) has reached out to the country’s Ministry of Finance for a review of cryptocurrency taxation.
Decline in Indonesia’s Crypto Tax Revenue
In 2023, Indonesia saw a significant decrease in its crypto tax income, which fell by 62% compared to the previous year. This occurred despite an increase in the value of Bitcoin.
The total tax revenue from cryptocurrency transactions in 2023 was $31.7 million (Indonesian Rupiah 467.27 billion). This decline was mainly due to a 51% decrease in crypto transaction volumes during the same period.
The government introduced a tax regime in May 2022 that imposed dual taxation on crypto transactions, including a 0.1% income tax and a 0.11% value-added tax (VAT). Local exchanges contributed approximately 0.04% to the national crypto bourse.
Request for Tax Evaluation
Bappebti has urged the Ministry of Finance to assess the implementation of crypto taxes. Tirta Karma Senjaya, Head of CoFTRA’s Market Development and Development Bureau, stated that this aligns with the classification of crypto as a commodity or asset.
With the transfer of supervision from CoFTRA to the Financial Services Authority (OJK), the Ministry of Finance, particularly the Directorate General (Dirjen) of Taxes, is expected to evaluate these crypto tax schemes.
At the 10th anniversary of the Indodax event in Jakarta on Feb. 27, stakeholders emphasized the importance of evaluating the tax regime, considering the evolving status of crypto as a significant player in the financial sector.
In January, Suryo Utomo, the Director General of Taxes at Indonesia’s Ministry of Finance reported a total collection of IDR 71.7 billion from crypto tax and fintech services businesses. He specified that IDR 39.13 billion ($2,492,047.15) came from crypto tax, while fintech taxes amounted to IDR 32.59 billion ($2,075,538.37).
Illegal Crypto Exchanges in Indonesia
In May 2023, the Blockchain Association of Indonesia uncovered 303 illicit crypto exchanges operating within the country. These unauthorized exchanges pose a significant threat to Indonesia’s formal tax system, as they undermine efforts to regulate and tax cryptocurrency transactions effectively.
Last year, the Bali province of Indonesia implemented a ban on the use of cryptocurrencies as payment methods for foreign tourists. This measure is part of a larger initiative to reinforce the country’s official currency, the rupiah, as the sole legal tender.
The Bali Provincial Government has issued warnings, stating that severe consequences such as deportation, administrative penalties, criminal charges, closure of businesses, and other strict sanctions will be imposed on foreign tourists found violating this ban.
Trisno Nugroho, the head of Bank Indonesia’s Bali Representative Office, reiterated that while cryptocurrency trading is permissible in Indonesia, using cryptocurrencies as a form of payment is not allowed.
This prohibition on crypto payments for tourists in Bali is a component of a broader strategy to oversee and manage the utilization of cryptocurrencies throughout the nation.
