Indonesia to introduce 0.1% crypto VAT and income tax from next month
Indonesia introduce a 0.1% crypto VAT tax as well income tax of the same rate on May 1
The move is in line with the nation's tax last year following its economic recovery from the COVID 19 pandemic.
According to Reuters on Friday, the archipelago, which is made up of more than 17,000 islands will begin charging 0.1% on both value-added tax and income tax by May 1
“Crypto-assets will be subject to VAT because they are a commodity as defined by the trade ministry,” tax official Hestu Yoga Saksama told a media conference last week. “They are not a currency … so we will impose income tax and VAT.”
VAT is a form of taxation applied to goods and services at every step along the supply chain or sale to end consumers. Indonesia's rate of 0.1% is lower than the 11% it charges for other products, by comparison, Australia levies a rate of 10% while the US has sales tax set at the state level ranging from 0%-11.5%
The country's wide-ranging tax reforms in last year the nation's economic recovery from the COVID-19 pandemic which included provisions to tax profits on crypto trading activity.
Saksama said that the Government of Indonesia is still working on implementing those regulations
In Thailand and Vietnam crypto for use in payments is outlawed though Indonesians are allowed to trade them as a commodity.
Indonesia is South-East Asia's largest economy, according to data by World Bank also the world's fourth-largest with a population exceeding 273 million people across 300 groups.