Indonesia has announced new tax rates on cryptocurrencies that will take effect from August 1, 2025. The changes apply to both domestic and foreign cryptocurrency exchanges.
New Crypto Tax Rates
Effective from August 1, 2025, sellers of cryptocurrency assets on domestic exchanges will pay a tax of 0.21% on each transaction, up from 0.1% previously. Sellers on overseas platforms will now pay a tax of 1% instead of 0.2%.
Additionally, the value-added tax (VAT) on mining will increase from 1.1% to 2.2%. Buyers will no longer need to pay VAT during purchases, which previously ranged from 0.11% to 0.22%. The government has also removed the 0.1% special income tax on mining. From 2026, income from mining will be taxed under personal or corporate income rules.
Reasons for Tax Increase
The Indonesian government cites the acceleration of cryptocurrency transactions, which grew more than three times to over $39.6 billion in 2024, as a key reason for the tax increase. There are over 20 million cryptocurrency users in the country.
Given the rapid growth, the government aims to:
* Generate more tax revenue from cryptocurrency activities. * Enhance compliance on local and foreign exchanges. * Improve regulation and accountability in this sector. * Promote trading on controlled markets.
Market Reactions and Impacts
The increase in tax to 1% may force some traders to abandon foreign platforms, while others will move to regulated domestic exchanges to avoid the higher fees.
The increase in VAT on mining may make operations less profitable, potentially driving smaller miners out of the market. In a broader context, other Southeast Asian nations may consider similar measures in the future.
Tokocrypto, a Binance-backed exchange, reacts positively overall to the updates, viewing them as a step towards the recognition of cryptocurrencies as financial assets. However, they called for a grace period of at least one month for businesses to adjust to the new taxes.
Indonesia's new policy reflects the government's evolving perspective on cryptocurrencies as financial assets. While the tax increases may create short-term pressure, they contribute to building a more regulated and transparent ecosystem in the long term.
