Indonesia will increase taxes on cryptocurrency transactions, with higher rates applied to trades on overseas exchanges, effective August 1, based on a new finance ministry regulation.

Cryptocurrencies are legally traded in Indonesia, but cannot be used as a means of payment.

In 2024, the total transaction value of crypto assets tripled from the previous year to over IDR 650 trillion ($39.67 billion).

There were more than 20 million users on crypto exchanges in Indonesia in 2024, exceeding the number of stock market investors.

Under the new regulation, sellers on domestic exchanges must pay a 0.21% tax on transaction value, up from 0.1%.

Sellers on overseas exchanges are charged 1%, increased from 0.2%. Buyers will no longer pay value-added tax (VAT), which was previously 0.11% to 0.22%.

The VAT rate on crypto mining was raised to 2.2% from 1.1%. A 0.1% special income tax on crypto mining will be eliminated in 2026, making mining income subject to the same personal or corporate income tax rates.

Binance-backed Tokocrypto welcomed the changes, stating they reflect Indonesia’s shift to categorizing cryptocurrencies as financial assets rather than commodities.

Tokocrypto proposed a grace period of at least one month to allow companies to adjust.

Tokocrypto also emphasized the importance of stronger oversight and tax enforcement on crypto transactions through foreign platforms.

The company requested fiscal incentives to support innovation, noting the new crypto tax rates are still higher than the capital gains tax rate on stock market investments.

PHOTO: FREEPIK

This article was created with AI assistance.