Indonesia Joins India in Taxing Crypto Returns
The Indonesian Ministry of Trade recently revealed that crypto taxes will finally be applicable to crypto investors in the country. This announcement also highlighted that the income tax and VAT will apply to capital gains and crypto transactions, respectively.
Taxation of Cryptocurrency Profits
The ministry settled on the decision of levying 0.1% from crypto earnings, meant to be deducted directly from exchanges.
Notably, the Indonesian government has had its eyes on the situation for a while now, introducing the tax talk in 2021. The ministry agreed that the enforcement agency overlooking crypto undertakings had not yet made a conclusive decision on the tax matter. However, the ongoing talks meant to agree on the rates of the taxes and when in 2022 the plan would go into action.
The country, like many countries globally, directed their attention to crypto asset investment during the global pandemic, to sustain their everyday lives. As such, it has seen a great boost in the earnings investors within the country are getting from cryptocurrencies. Likewise, it introduced more regulations to take control of what happens in the crypto world, accepting over 200 currencies and 13 platforms.
Nonetheless, this wasn’t the halt of developments in the Indonesian crypto community. Its industry now holds significance in crypto mining, increasing the returns from virtual currencies by a significant percentage. Now, the commodities income per month stands at approximately $5 billion, despite the market volatility the currencies endure.
Crypto Regulation Changes in Indonesia
BAPPEBTI is the regulatory body for crypto transactions and trade in Indonesia, governed with handling the rules surrounding crypto. The crypto tax introduction is not the first of the many changes the body has made concerning crypto in the country. Since 2019, there have been several tweaks in how it controls the industry, considering the growing opportunities there.
In October 2021, the body introduced the new regulations, the BAPPEBTI Regulation No. 8, dictating guidelines to handle physical markets of the commodities in their future trade. It listed new regulations on licensing and what everyone handling crypto was required to do. However, there still is not any stand of the government on ICOs and other crowdfunding options.
At the same time, it insists that every company and trader in the country maintains the path by following AML regulations and keeping away from illegal activities, including connection to terrorism and fraud.
Now, the current tax regulations are a way for the government to benefit from the booming space. One more thing for the potential crypto tax payer should know is the 0.1% rate is lower compared to other commodities within the country.
India’s Worrying Tax Regulations
Traders in India are wondering what the next steps of their industry will be, following confirmation on March 24 of the government’s decision on crypto taxes as high as 30%. While this could be a lesser issue for institutional and other huge traders, retail traders may severely suffer from the stringent taxation regulations.
Otherwise, it has been a growing worry about the Indian government’s stand on crypto. The Indonesian decision shows the growing gap between different countries and their crypto guidelines. What does the future hold for crypto if guidelines are not friendly towards its progress?
