Indonesia's Crypto Regulator Urges Government to Reconsider Tax Rates

According to CoinDesk, an official at Indonesia's crypto regulator, the Commodity Futures Trading Supervisory Agency (Bappebti), has called on the Finance Minister to reconsider tax rates for digital assets. Currently, crypto is treated as commodities in the Southeast Asian nation and is subject to value-added tax (VAT) and income tax. However, this classification may change when crypto oversight switches over to the country's broader financial services regulator OJK in 2025. Tirta Karma Senjaya from Bappebti said during an event on Tuesday that the digital asset industry is still in its infancy and needs space to grow before making significant tax contributions to national revenue. Existing taxes have been called burdensome for users and service providers. Indonesian crypto exchanges blamed a dramatic 60% drop in trading volumes last year from 2022 on taxes, which they fear could drive users away to foreign exchanges. Bappebti has not specified how it wants the Finance Ministry to revise the taxes, but it is likely that it seeks the removal of VAT, to match how stocks are treated. The industry expects the shift in oversight to OJK, which oversees all financial services in Indonesia, including banking, capital markets, insurance, and pensions, could mean crypto will be treated as securities in the country. Dwi Astuti, a spokesperson for the Ministry of Finance, said on Wednesday that they 'welcome input from Bappebti and the public' and that the issue of taxes 'will certainly be discussed internally.'