Indonesia to hike tax rate on crypto transactions

Indonesia’s Ministry of Finance has introduced a comprehensive overhaul of its cryptocurrency tax system, effective August 1, 2025. The new rules increase taxes on crypto sellers and miners, while eliminating value-added tax (VAT) for buyers, signaling a shift in how the country treats digital assets.

Key Changes at a Glance

• Domestic sellers will see their income tax rate more than double, from 0.1% to 0.21% of each transaction.
• Foreign platforms, including Binance and Bybit, will face a new levy of 1%, up from 0.2%, in an effort to close loopholes used to bypass local taxation.
• Buyers will benefit from a full VAT exemption, which previously ranged from 0.11% to 0.22%, making crypto more accessible to retail investors.
• Miners will now pay 2.2% VAT, up from 1.1%, though the 0.1% income tax applied to mining will be scrapped. By 2026, mining income will fall under standard personal or corporate tax rules.

Finance Minister Sri Mulyani Indrawati said the changes are intended to provide greater “legal certainty” and reflect crypto’s reclassification from a commodity to a regulated financial asset.

Market Growth Drives the Policy Shift

Indonesia’s decision follows rapid growth in crypto adoption. In 2024, total transaction volume tripled to 650 trillion rupiah ($39.7 billion), with over 20 million users, the majority aged between 18 and 30. That figure now surpasses the country’s traditional stock investor base.

However, tax revenue fell by 63% in 2023, largely due to traders shifting activity to foreign platforms to avoid Indonesia’s previous dual-tax regime. Authorities hope the revised structure will reduce tax leakage and level the playing field between local and offshore exchanges.

Industry Reactions: Mixed but Measured

Domestic exchanges, including Tokocrypto and INDODAX, welcomed the VAT exemption for buyers and the clampdown on overseas competitors. At the same time, they urged the government to allow a short grace period for implementing technical changes.

However, mining groups expressed concern. A Jakarta-based collective warned that the new 2.2% VAT “favors large-scale operators and puts pressure on grassroots innovation.”

Economists noted that while the reforms aim to increase tax efficiency, they could lead to short-term volatility. Local platforms may face margin pressure, and foreign providers might explore relocation to lower-tax jurisdictions like Singapore.

Category	Previous Tax Rate	New Tax Rate (as of Aug 1, 2025)	Change %
Domestic Sellers	0.1% Income Tax	0.21% Income Tax	+110%
Foreign Sellers	0.2% Income Tax	1.0% Income Tax	+400%
Buyers (Retail)	0.11–0.22% VAT	0% VAT	−100%
Crypto Miners	1.1% VAT + 0.1% IT	2.2% VAT, 0% Income Tax	VAT +100%

Source: Indonesian Ministry of Finance, 2025 announcement on cryptocurrency taxation.

Regulatory Reform in Progress

The tax update aligns with Indonesia’s broader move to tighten oversight of digital assets. Supervision is expected to shift from the Commodity Futures Trading Agency (CoFTRA) to the Financial Services Authority (OJK), though implementation remains incomplete.

Recent enforcement steps include the suspension of Worldcoin in May 2024 for failing to obtain proper licensing. Indonesia also signed a data-sharing agreement with Australia in 2024 to track cross-border crypto tax evasion.

Recap :

Indonesia’s reforms mirror a regional trend toward balancing innovation with regulation. While the Finance Ministry is targeting a $30 billion revenue gap, the buyer-side tax relief echoes similar moves in Thailand and aims to encourage responsible growth in the sector.

Analysts say Indonesia’s youth-driven crypto boom remains attractive to global investors. Firms like OSL (Hong Kong) recently committed $15 million to expand in the market. However, experts caution that the long-term success of the reforms will depend on regulatory agility and the government’s ability to support innovation while enforcing compliance.