Starting May 2022, Purchases of Crypto Assets Are Taxable

Starting May 1, 2022, every transaction to purchase crypto assets is subject to Income Tax (PPh) and Value Added Tax (VAT) with a final rate of 0,1 percent each.

"Currently, the government is formulating technical rules and the form of a Minister of Finance Regulation (PMK)," said Director of Tax Regulation I DJP Hestu Yoga Saksama as quoted from CNNIndonesia.

Meanwhile, the policy of implementing the crypto tax was taken because Bank Indonesia (BI) and the Ministry of Trade (Kemendag) from the beginning set crypto as a commodity, not a means of payment.

Later, the procedure for collecting crypto taxes will be designed similar to the process of buying shares. This means that there are parties who will cut or collect taxes from investors.

Based on data from the Commodity Futures Trading Supervisory Agency (BAPPEBTI) of the Ministry of Trade as of February 2022, the number of crypto investors reached 12,4 million, an increase from the previous year's 11,2 million investors. Meanwhile, total crypto asset transactions were recorded at IDR 83,8 trillion in that period.

Crypto growth in Indonesia

In the released release, Indodax's Founder & CEO Oscar Darmawan had voiced his concerns regarding this policy. According to him, the determination of PPh and VAT at 0,1 percent is still quite expensive. Given that the adoption of crypto in Indonesia is experiencing rapid growth, the implementation of this tax can make the crypto market in the country lagging behind.

If possible, he suggested that the crypto tax rate could be set the same as that already imposed on stock transactions in Indonesia.

Separately in his official statement, Oscar said that Indonesia is currently in 5th position in Southeast Asia, after Vietnam, Thailand, the Philippines, and Malaysia regarding crypto adoption in 2021, citing Chain Analysis data. Indonesia even beat Singapore which is in 8th place in Southeast Asia.

According to Oscar, the data indicates that crypto is becoming one of the commodities that is increasingly becoming a commodity mainstream in Indonesia. Meanwhile, Indonesia ranks 25th in terms of crypto adoption in the world.

Not only about the openness of the domestic ecosystem, he continued, sentiments such as the looseness of the policy on the use of crypto also had a significant influence on the growth of crypto.

"Regulations in various countries have recently made crypto sentiment shift in a positive direction. The Brazilian capital, Rio de Janeiro will allow its citizens to pay taxes with crypto, and plans for other types of payments. In Vietnam, the government is drafting a bill related to crypto. While in the UK, the government will release new rules that focus on stablecoin because of the massive growth in recent times," he said.

Besides Indonesia, several countries that impose taxes on crypto include Japan and India. Japan stipulates an income tax of 55 percent, as well as a final rate of 20 percent for foreign taxpayers who have crypto assets and must be paid when leaving Japan.

Meanwhile, India imposes a 30 percent income tax on all kinds of digital assets, including cryptocurrency. This policy is effective from April 1, 2022.

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