Indonesia’s regulatory authority, the Commodity Futures Trading Supervisory Agency (Bappebti), has called upon the Ministry of Finance to reassess the taxation framework governing cryptocurrencies.
Challenges and Shifts in Indonesia’s Crypto Tax Collection
Indonesia observed a significant downturn in crypto tax revenue in 2023, prompting a 62% decline compared to the previous year, despite Bitcoin’s price surge.
The current tax regime, initiated in May 2022, involves dual taxation on crypto transactions, encompassing both income tax and value-added tax (VAT), contributing to the diminishing tax revenues.
Calls for Reform: Evaluating Indonesia’s Crypto Tax Regime
At the recent Indodax event in Jakarta, stakeholders highlighted the need for periodic reviews of the crypto tax structure, acknowledging the evolving role of cryptocurrencies in the financial sector.
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 in January.
Also Read: Indonesia Expects To Launch Its National Crypto Exchange Around June
Addressing Illicit Crypto Exchanges: Ensuring Regulatory Compliance
In May 2023, the Blockchain Association of Indonesia unveiled the existence of 303 unauthorized crypto exchanges operating within the country, posing a threat to Indonesia’s tax system.
The proliferation of illicit exchanges complicates tax authorities’ efforts to monitor and tax crypto activities accurately, leading to potential revenue losses for the government.
Stricter Measures Against Crypto Usage: Bali’s Stance on Cryptocurrency Payments
The Bali province has prohibited the use of cryptocurrencies as payment methods for foreign tourists to reinforce the national currency, the rupiah, as the sole legal tender.
Trisno Nugroho, head of Bank Indonesia’s Bali Representative Office, emphasized the prohibition on crypto payments as part of a broader strategy to oversee cryptocurrency usage nationwide.
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