Indonesian regulator, Commodity Futures Trading Supervisory Authority (KOFTRA)We have asked the Treasury to re-evaluate the taxation regime applicable to cryptocurrencies.
Challenges and changes to Indonesian cryptocurrency tax collection
Despite the surge in Bitcoin prices, Indonesia will see a significant decline in cryptocurrency tax revenues in 2023, down 62% from the previous year.
The current tax regime, which began in May 2022, includes double taxation of cryptocurrency transactions covering both income tax and value added tax (VAT), contributing to lower tax revenues.
Call for Reform: Evaluating Indonesia’s Cryptocurrency Tax System
At a recent Indodax event held in Jakarta, stakeholders acknowledged the evolving role of cryptocurrencies in the financial sector, emphasizing the need for periodic reviews of cryptocurrency tax structures.
The Indonesian Ministry of Finance’s Director General of Taxation reported that a total of IDR 71.7 billion was collected from cryptocurrency taxes and fintech service businesses in January.
Also read: Indonesia plans to launch national cryptocurrency exchange around June.
Addressing Illegal Cryptocurrency Transactions: Ensuring Compliance
In May 2023, the Indonesian Blockchain Association disclosed the existence of 303 unauthorized cryptocurrency exchanges operating within Indonesia, posing a threat to Indonesia’s tax system.
The proliferation of illicit exchanges complicates tax authorities’ efforts to accurately monitor and tax cryptocurrency activity, leading to potential revenue losses for governments.
Stricter measures on cryptocurrency use: Bali’s stance on cryptocurrency payments
The province of Bali has banned the use of cryptocurrencies as a payment method for foreign tourists in a bid to strengthen the domestic currency, the rupiah, as the only legal tender.
Trisno Nugroho, head of Bank Indonesia’s Bali representative office, highlighted the ban on cryptocurrency payments as part of a broader strategy to oversee cryptocurrency use across the country.