Indonesia Reclassifies Crypto as a “Financial Asset,” Overhauls Tax System

Key Points

1. New tax rates for crypto transactions: 0.1% to 0.21% for local exchanges and 0.2% to 1% for overseas exchanges, with VAT on purchases removed.

2. Increased VAT on mining to 2.2%, and the 0.1% special income tax on mining will be phased out by 2026, shifting to personal or corporate tax rates.

3. Crypto is now classified as a 'financial asset,' transferring regulatory oversight from Bappebti to the Financial Services Authority (OJK) and Bank Indonesia.

4. Tokocrypto, a Binance-backed exchange, supports the changes but expresses concerns about the impact on businesses and calls for a transition period.

5. The government aims to boost tax revenue, citing the crypto market's growth to over 650 trillion rupiah ($39.67 billion) and 20 million users in 2024.