The Indonesian Commodity Futures Trade Regulatory Agency (Bappebti) is reportedly planning to impose a crypto transaction tax amid the growing popularity of digital currencies this bull season. The regulatory body is planning to impose a type of final income tax (PPh Final) that would be levied by all 13 cryptocurrency exchanges registered with the regulatory body. The tax rates haven’t been decided yet, as the proposal is currently under review.
Teguh Kurniawan, the executive chairman of the Indonesian Crypto Asset Traders Association (Aspakrindo) has proposed a tax rate of 0.05% which is lower than the current taxation on the share market in the country. The chairman explained the reason behind his suggested lower interest rate and said,
“We hope the tax rate will not be too high, [or] we fear that investors may turn to invest in crypto [assets] through illegal channels, which would be harmful.”
Indonesia Has Approved Several Crypto Regulations Over the Past Year
Indonesian regulators over the past year have worked hard to incorporate positive crypto regulations, especially over the past year. In December the regulatory body recognized 229 cryptocurrencies as a legal commodity for trade followed by approval of 13 crypto exchanges to operate in February. While the selected digital assets are recognized as a tradable commodity, they cannot be used as a form of payment
Most of the cryptocurrency exchange operators have shown their support for the proposed crypto transaction tax and suggested that it won’t add any burden on the investors. The crypto trade in Indonesia has increased significantly over the years and accounts for nearly $2.8 billion monthly, however it accounts for less than 1% of the total world crypto trading volume. This indicates that even if the government finalized a tax on the crypto transaction it won’t account for a significant chunk of the government’s revenue.