Bappebti, Indonesia’s Commodity Futures Trading Regulatory Agency is contemplating introducing taxation for crypto transactions. A report unveiled this news on April 27, noting that the authority’s move is inspired by the increasing interest in cryptocurrencies in the country. Reportedly, the agency claims that the government is planning to introduce a final income tax (PPh) model, which applies to all crypto transactions.
According to the report, the 13 crypto trading platforms, which fall under the regulator’s purview will automatically charge the tax should the agency actualise these plans. Commenting on these plans, Bappebti’s head, Sidharta Utama, said that the matter is currently going through an internal review at Bappebti before the authority brings Indonesia’s Fiscal Policy Agency (BKF) into the loop. Utama also disclosed that the agency has not yet decided on the tax rate.
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Reportedly, the introduction of crypto taxation is part of the agency’s efforts to gain more control over the Indonesian crypto markets. For instance, in December 2020, Bappebti issued a regulation that classified 229 digital currencies as legally tradeable products. Also, in February this year, the agency issued a regulation that led to the licensing of the 13 aforementioned crypto trading platforms. In so doing, Bappebti sought to offer legal certainty while protecting crypto adopters against fraudulent characters.
High tax rates might inhibit crypto adoption
When the players in the Indonesian crypto scene caught wind of this news, they were quick to air their sentiments. For instance, the executive chairman of the Indonesian Crypto Asset Traders Association (Aspakrindo), Teguh Kurniawan Harmanda said that the group had previously suggested that Bappebti apply a tax rate of 0.05%, which is lower than the tax rate for shares’ transactions on the local forex exchange. However, the agency never got back to Aspakrindo, according to Harmanda.
He went on to note that the association hopes the agency will introduce fair tax rates to help prevent crypto adopters in the country from finding illegal channels for buying crypto, which would be detrimental to both the licensed exchanges and the buyers.
Oscar Darmawan, the CEO of Indodax, a leading crypto exchange in Indonesia was optimistic about the taxation plans, noting that he does not expect the changes to burden investors. He added that blockchain and crypto adoption in the country is still minimal and that the government would have to support the industries to achieve mass adoption.
However, the government only allows the trading of crypto as commodities. The use of virtual assets as currencies is prohibited in the country, seeing as the 2011 Currency Law cites that that function is exclusive to the rupiah.