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Indonesia Is Planning To Impose Tax On Cryptocurrency Transactions

Indonesia Local cryptocurrency exchange Indodax, says that the tax rate is too high and may deter individuals from investing in cryptocurrency & digital assets.

Indonesia Is Planning To Impose Tax On Cryptocurrency Transactions

According to CNN Indonesia, which cited a statement from a spokesperson of the finance ministry, the Indonesian government intends to begin charging taxes on cryptocurrency transactions in May this year.

In addition to the 0.1 % income tax on capital gains, the levy would also include 0.1% value-added tax (VAT) on cryptocurrency asset transfers. Due to the fact that crypto assets are treated as commodities rather than payment methods by the government, the VAT charge is applied to them – stocks, on the other hand, are only subject to income tax and are free from VAT costs.

The technical specifics are still being worked out by the government, which will be published as a rule issued by the finance minister once they are finalised.

CNBC Indonesia quoted Oscar Darmawan, the CEO of local cryptocurrency exchange Indodax, as saying that the tax rate is too high and may deter individuals from investing in cryptocurrencies and other digital assets. He expects that the overall tariff on income tax and VAT would be reduced to roughly 0.1%, which is similar to the rate that is imposed on stocks.

Following the outbreak of COVID-19 in Southeast Asia’s largest economy, the demand for digital assets has increased, with the number of cryptocurrency asset holders reaching 11 million by the end of 2021.

According to data from the Commodity Futures Trading Regulatory Agency, the total value of crypto asset transactions in commodity futures markets hit 859.4 trillion rupiah ($59.8 billion), an increase of more than tenfold from the value of transactions in 2020.

Indonesians are permitted to exchange cryptocurrency assets as a commodity, but they are not permitted to utilise them as a form of payment.

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