The Commodity Futures Trading Supervisory Agency (Bappebti) of Indonesia has requested the Ministry of Finance to reassess the country’s crypto taxation policies. Indonesia experienced a significant decline in crypto tax revenue in 2023, dropping by 62% despite the increase in Bitcoin’s value.

Key Points:

  • Total tax revenue from crypto transactions in 2023 was $31.7 million.
  • The tax regime imposed dual taxation on crypto transactions.
  • The decline was attributed to a 51% decrease in crypto transaction volumes.

The tax regime, which was introduced in May 2022, imposed income tax and value-added tax (VAT) on crypto transactions. Local exchanges contributed a percentage to the national crypto bourse. Bappebti has urged the Ministry of Finance to evaluate the implementation of crypto taxes, emphasizing the need for periodic tax reviews.

At the 10th anniversary of the Indodax event, stakeholders highlighted the importance of assessing the tax regime due to the evolving role of crypto in the financial sector. Suryo Utomo, 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.

Taxation Challenges and Solutions:

  • Local exchanges voice concerns about high tax rates impacting revenues.
  • Suggestions to subject crypto transactions solely to income tax for market growth.

In a separate development, the Blockchain Association of Indonesia uncovered 303 illicit crypto exchanges operating within the country. This poses a threat to Indonesia’s formal tax system and revenue collection efforts. The Bali province implemented a ban on using cryptocurrencies as payment methods for foreign tourists to strengthen the official currency, the rupiah, as the sole legal tender.

While crypto trading is allowed in Indonesia, using cryptocurrencies for payments is prohibited. This ban is part of a broader strategy to regulate and manage cryptocurrency use in the country.

For more updates on crypto news, continue exploring Global Crypto News.

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