An official at Indonesia's cryptocurrency regulator, the Commodity Futures Trading Supervision Agency (Bappebti), called on the Finance Minister to reconsider tax rates on digital assets.
Cryptocurrencies are treated as goods in the Southeast Asian country and are therefore subject to value-added tax (VAT) and income tax. But this is set to change when oversight of cryptocurrencies moves to the country's broader financial services regulator OJK in 2025.
“Since cryptocurrencies are expected to join the financial sector by January 2025, we urge the Director-General of Taxation to review these taxes. It has been more than a year since these rules were made, and taxes are usually scrutinized every year,” Tirta Karma Singhaya said of Babbitty during an event on Tuesday.
Tirta also said that the digital assets industry is still in its infancy and needs room to grow before making significant tax contributions to national revenues.
The industry described the current taxes as burdensome for users and service providers. Indonesian cryptocurrency exchanges have blamed a massive 60% drop in trading volumes last year from 2022 on taxes, which they fear will push users away to foreign exchanges.
While Babbitty did not specify how she wants the Ministry of Finance to review taxes, it is likely that she is seeking to abolish the value-added tax, to match how stocks are treated. The industry expects that the shift in supervision to the OJK – which oversees all financial services in Indonesia, including banking, capital markets, insurance and pensions – could mean that cryptocurrencies will be treated as securities in the country.
Doi Astuti, spokesman for the Ministry of Finance, said on Wednesday that they “welcome the input of Babbiti and the public” and that the tax issue “will certainly be discussed internally.”
