The government of Indonesia will introduce the tax on digital assets from May 1, 2022.
Southeast Asia is widely prosperous in the blockchain market, with industry leaders such as Singapore claiming the titles of the “global crypto hub” and bringing in an unprecedented amount of investment in the FinTech sector.
In fact, it appears that Indonesia will follow in the footsteps of Singapore and Thailand by levying value-added tax (VAT) on cryptocurrency transactions, while capital gains from digital investments will be hit by 0.1% income tax on each transaction.
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In an interview with Reuters, an official familiar with the Hestu Yoga Saksama case told reporters that the reason behind the tax is that crypto assets are defined by the Indonesian Ministry of Commerce as “commodities”, not “currency”.
Although Indonesia was considered a crypto-friendly country, digital asset companies and investors were under a lot of regulatory scrutiny in 2022.
In January, Indonesia’s Financial Service Authority issued a warning against financial institutions offering cryptocurrency services, comparing digital assets to Ponzi schemes.
Similarly, Singapore’s Ministry of Finance announced earlier last month that a tax will be imposed on NFT transactions, while income from capital gains would remain unaffected.
Crypto regulation in Thailand has also been up and down in recent months. In early March, the Thai government decided to cut VAT on crypto asset transactions and investments in start-ups by 15%.
However, just a few weeks later, the Thai SEC announced that as of today, April 1, they will be halting all crypto payments for goods and services.
by Dom Z. – Crypto Analyst, BitDegree