From May 1, the Indonesian government reportedly plans to charge a 0.1% capital gains tax on crypto investments, as well as a value-added tax on digital asset transactions.
Indonesian government officials had considered taxing crypto transactions numerous times, despite warning its citizens about using digital assets for payments as early as 2014.
In a report on Friday, Reuters reported that Hestu Yoga Saksama, a spokesperson for Indonesia's tax office, stated that the country would impose income taxes and VAT on crypto assets as they are viewed as commodities and not currencies. Although the government is still considering how to implement such taxes, legislation passed following the pandemic laid the groundwork for collecting revenue on cryptocurency transactions.
Bappebti, Indonesia's commodity futures trading regulatory agency, confirmed a report that crypto transactions in the country came to 83.8 trillion rupiah in February 2022 – about $5.8 billion. Furthermore, the number of crypto holders rose by more than 11%, from 11.2 million in 2021 to 12.4 million. The Bappebti recognized more than 200 cryptocurrencies as commodities, which could be legally traded, in December 2020 and named 13 exchanges as licensed crypto businesses in February 2021.
Although Indonesia's government might be preparing a regulatory framework for cryptocurrencies, culture may play a significant role in the mainstream adoption of cryptocurrency. In November, Indonesia's National Ulema Council, which consists of Islamic scholars – roughly 87% of Indonesia's population identifies as Muslim – said crypto is forbidden as a means of transaction under its religious laws. Even though the council's rulings can be a source of "legislative inspiration," they are not legally binding in Indonesia.