Indonesia is seeking to capitalize on growing adoption of crypto within its borders by extending a transaction tax.
Starting on 1 August, the southeast Asian archipelago nation will raise the levy on cryptocurrency transactions, in particular for those conducted through foreign exchanges.
The country is the fourth most populous in the world and ranked third on the 2024 Global Crypto Adoption Index released by blockchain research firm Chainalysis.
Popular investment
According to the Indonesian financial regulator, crypto has become a common investment option in the country, with more people opting for it than the traditional stock market. While people can invest, digital assets are not yet allowed as a means of payment.
In 2024 there were more than 20 million Indonesian users on crypto exchanges. The total transaction value of their assets was greater than $39.67 billion, or 650 trillion rupiah, triple the amount from 2023.
Analysis company Statista projects there to be almost 49 million Indonesian users by 2026.
5x increase for foreign exchanges
The new tax hikes are as follows:
- Sellers using a domestic exchange pay a 0.21% tax on the transaction value – 2x increase from 0.1%
- Sellers using a foreign exchange pay a 1% tax on the transaction value – a 5x increase from 0.2%
- VAT on mining crypto assets is increased to 2.2% from 1.1%
There is also some relief:
- Crypto buyers are no longer subject to VAT – decrease from a 0.11% to 0.22% range
- The 0.1% special tax on mining income is removed
Binance-backed Tokocrypto, Indonesia’s first domestic exchange, was positive about the changes. "We also emphasize the importance of strengthening oversight and tax enforcement on crypto asset transactions conducted through foreign platforms," the company said in a statement.
