Indonesia’s Bappebti, also known as Commodity Futures Trade Regulatory Agency, has considered levying a tax on all cryptocurrency transactions taking place on regulated exchanges within the country.
It has been reported by The Phnom Penh Post that currently, thirteen cryptocurrency exchanges fall under Bappebti’s regulatory oversight, and the tax would be automatically applied by these platforms should it be approved.
Sidharta Utama, the head of Bappebti, said:
“It is currently [undergoing] internal review at Bappebti, then we will coordinate with the BKF.”
He added that the actual tax rate had not yet been decided. The BKF refers to Indonesia’s Fiscal Policy Agency.
However, regulatory activity in Indonesia surged during the past six months as Bitcoin (BTC) and the wider cryptocurrency market soared to new all-time highs (ATHs).
In December 2020, Bappebti issued a regulation recognizing an initial 229 cryptocurrencies as legally tradable commodities, while leaving the door open for traders to suggest adding new coins to the list. In February, the agency identified 13 trading platforms that it recognized as licensed entities.
A country that's historically been wary of cryptocurrency as a means of payment, Indonesia is now considering levying a tax on all cryptocurrency transactions within its borders. https://t.co/9Ize9iHo0o — Cointelegraph (@Cointelegraph) April 27, 2021
The report said that Indonesia originally warned against the use of cryptocurrencies as a means of payment in 2014 and, by 2017, had introduced legislation that demanded fintech companies register with the Bank of Indonesia to ensure they weren’t using cryptocurrencies in payment systems.
Teguh Kurniawan, the Chairman of the Indonesian Crypto Asset Traders Association, said that the group he represents proposed a tax rate of 0.05% by adding that a high tax rate could push people toward illegal channels when purchasing cryptocurrencies.
Thus, Kurniawan said:
“To date, there has been no feedback on the type of tax. We hope the tax rate will not be too high, [or] we fear that investors may turn to investing in crypto [assets] through illegal channels, which would be harmful.”