Indonesia is set to increase taxes on crypto transactions, particularly targeting offshore platforms. Starting August 1, a new 1% levy will apply to sales through foreign exchanges, up from 0.2%. Domestic transactions will see an increase from 0.1% to 0.21%. The policy aims to capture revenue from Indonesia's growing crypto market, valued at $39.67 billion. Aiming for compliance, the new regulations also reclassify digital assets as financial instruments under the Financial Services Authority (OJK). Further changes include the elimination of value-added tax (VAT) for crypto buyers and a rise in mining VAT to 2.2%. Experts caution that while the VAT removal could lower costs for new investors, the tax hikes might deter frequent retail traders and push some activity offshore. Enforcement challenges remain, especially concerning tracking cross-border transactions. Indonesia's crypto tax journey began in May 2022 with the introduction of dual taxation, but revenues fell significantly in 2023, prompting the new measures to bolster compliance and revenue generation.

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