Indonesia hikes crypto tax on overseas sellers to 1% and doubles miner VAT to 2.2% from August 1 to close revenue gaps

Starting August 1, Indonesia will implement a revised cryptocurrency tax framework, significantly increasing levies on overseas sellers while adjusting obligations for miners and buyers. The finance ministry’s updated rules, effective from the specified date, reclassify digital assets as financial instruments rather than commodities, aiming to close revenue gaps from offshore transactions [1]. Sellers on international platforms face a tax rate hike from 0.5% to 1%, while domestic sellers’ rates rise from 0.1% to 0.21% [2]. Miners will see their VAT doubled to 2.2%, but buyers are now fully exempt from VAT, which had previously ranged between 0.11% and 0.22% [3].

The adjustments align with Indonesia’s strategy to manage a rapidly growing market. Transaction volumes surged to over 650 trillion rupiah in 2024, driven by over 20 million local traders, many aged 18–30, trading Bitcoin, Ethereum, and USDT [4]. Domestic exchanges like Tokocrypto and INDODAX argue the reforms will reduce offshore competition by eliminating tax advantages previously enjoyed by foreign platforms [5]. Regulatory oversight will also shift from the Commodity Futures Trading Agency to the Financial Services Authority, though delays persist due to incomplete regulations [6].

Analysts highlight that the policy responds to a 63% drop in crypto tax revenue in 2023, despite a 160% rise in Bitcoin’s price, as traders avoided domestic platforms to evade high combined taxes. However, the revised structure risks deterring market growth if rates remain higher than capital gains taxes on stocks [7]. To address this, the government has suspended unregulated operations, such as halting Worldcoin’s activities in May for bypassing licensing requirements [8].

The tax overhaul coincides with Indonesia’s efforts to solidify its position as a regional crypto hub. Despite a 2022 dual taxation policy that dampened activity, the government has pursued international cooperation, including a 2024 information-sharing agreement with Australia to enhance tax compliance [9]. Local platforms, however, urge a grace period for industry adaptation and fiscal incentives to sustain innovation [7].

Sources:

[1] AInvest. [2] Reuters. [3] Coinspeaker. [4] Cryptonews. [5] FinanceFeeds. [6] OneSafe. [7] GuruFocus. [8] Cryptonews. [9] Yahoo.co.

[1] "Indonesia Hikes 1% Tax on Overseas Crypto Sellers, 2.2%..." [https://www.ainvest.com/news/indonesia-hikes-1-tax-overseas-crypto-sellers-2-2-miner-vat-ends-buyer-vat-august-1-2507/]

[2] "Indonesia to raise tax rate on crypto transactions" [https://ca.news.yahoo.com/indonesia-raise-tax-rate-crypto-053822705.html]

[3] "Indonesia Scraps Crypto VAT, Doubles Mining Fees in ..." [https://www.coinspeaker.com/indonesia-drops-vat-crypto-buyers-doubling-minner-fees/]

[4] "Indonesia Hikes Crypto Taxes Up to 5x Starting August 1, ..." [https://cryptonews.com/news/indonesia-hikes-crypto-taxes-up-to-5x-starting-august-1-mining-vat-doubles-to-2-2/]

[5] "Indonesia Hikes Crypto Tax Rates Amid Surging Market ..." [https://financefeeds.com/indonesia-hikes-crypto-tax-rates-amid-surging-market-activity/]

[6] "Indonesia's Crypto Tax Reforms: A Mixed Bag for Investors" [https://www.onesafe.io/blog/indonesias-crypto-tax-reforms-navigating-new-financial-landscapes]

[7] "Indonesia Increases Tax Rates on Cryptocurrency ..." [https://www.gurufocus.com/news/3015273/indonesia-increases-tax-rates-on-cryptocurrency-transactions]

[9] "Indonesia to hike crypto transaction taxes starting August" [https://www.coinlive.com/en/news-flash/862991]