Indonesia flipflops, plans to tax crypto profits

Indonesia, Southeast Asia’s biggest economy, plans to tax profits on cryptocurrency trades.

The plan is still at the discussion stage, Neilmaldrin Noor, a spokesman at Indonesia’s tax office, told Reuters on Tuesday. The office is considering levying income tax on crypto profits.

“It is important to know that… if there is a profit or capital gain generated from a transaction, the profit is an object of income tax,” said Neilmaldrin. “So the tax payer who receives capital gain has to pay the tax and report it.”

Indonesia treats crypto as a commodity for trading but has banned its use as a payment instrument in the country.

Last month, Teguh Kurniawan Harmanda, COO of local crypto exchange Tokocrypto, revealed Indonesia’s crypto taxation plan. He told CNBC Indonesia that industry players and government agencies, including the Trade Ministry’s Futures Exchange Supervisory Board (Bappebti), were discussing how to impose a tax on crypto transactions.

Harmanda said the proposed income tax on crypto profits is 0.05%, smaller than the income tax imposed on stock trades, which is currently 0.1%.

Contributed by The Block.