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Indonesian regulators consider tax on cryptocurrency transactions

by Serge Shlykov

Indonesia’s commodity futures regulator (known as Bappebti) is considering imposing a tax on all cryptocurrency trading on the country’s regulated exchanges.

Currently, 13 cryptocurrency exchanges fall under Bappebti’s regulatory control, and the tax will be automatically applied by these platforms if approved, according to a report by the Phnom Penh Post.

It is being reviewed internally at Bappebti and then we will coordinate it with BKF, said Sidharta Utama, head of Bappebti, adding that the actual tax rate has not yet been determined. BKF means the Indonesian Tax Policy Office.

Regulatory activity in Indonesia has increased over the past six months as bitcoin (BTC) and the broader cryptocurrency market have risen to unprecedented heights. In December 2020, Bappebti issued a ruling recognizing the original 229 cryptocurrencies as legally traded goods, while leaving traders free to propose adding new coins to the list. In February, the agency identified 13 trading platforms that it recognizes as authorized.

Indonesia initially warned against the use of cryptocurrencies as a means of payment in 2014, and in 2017 introduced a law requiring fintech companies to register with Bank Indonesia to ensure they do not use cryptocurrencies in payment systems.

Indonesian Crypto Asset Traders Association president Teguh Kurniawan said the group he represents has proposed a tax rate of 0.05 percent, adding that the high tax rate could push people into illegal channels when buying cryptocurrencies.

So far, there has been no tax refund. We hope the tax rate is not too high, [otherwise] we are concerned that investors will move to invest in crypto [assets] through illegal channels, which would be detrimental, Kurniawan said.

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