As is well known, the Government of Indonesia has officially imposed crypto asset tax since May 1, 2022 which is regulated through Minister of Finance Regulation (PMK) Number 68/PMK.03/2022. The applicable rate includes Value Added Tax (VAT) on trading crypto assets of 0.11 percent of the transaction value in the event that the organizer of the trade is a Physical Asset Trader (PFAK); VAT on trading crypto assets 0.22 percent of the transaction value in the event that the trade organizer is not by PFAK; VAT on mining services of 1.1 percent of the conversion value of crypto assets and mining services; Income Tax (PPh) Article 22 on trading crypto assets of 0.1 percent of the value of crypto assets (if it is a PFAK); Income Tax Article 22 for mining crypto assets of 0.2 percent of the value of crypto assets (if not PFAK); as well as the final Article 22 Income Tax on crypto asset mining income of 0.1 percent of the income received or earned by crypto asset miners.
“For corporate income tax, you have to provide licenses more easily and when you grant licenses, then you can also request data. So it’s pretty much counterintuitive. It is much better to provide a license and then I highly recommend not taxing user transactions, but corporate income tax, try to make it corporate Income Tax (PPh),” said Changpeng Zhao.
Thus, he concluded, it does not mean that a higher tax percentage always gives the state optimal tax revenue.
“And in the crypto (ecosystem) there is a bit of a concept of national borders. So when a large tax burden is given to local entities, it will make local transactions, local transit, and transactions that occur on local platforms very heavy. Until finally making all those transactions will move to an off-shore platform, which ends with little tax income. But if you impose less tax and the volume of transactions is high, the total amount of tax received will actually be higher,” said Changpeng Zhao.
On a different occasion, the Minister of Finance Sri Mulyani Indrawati said that the state had collected IDR 159.12 billion from taxing crypto assets in the period May 1 to September 30 2022. This crypto asset tax consists of PPh on crypto asset transactions through PPMSE and VAT on levy by non-treasurers.
“We have collected crypto asset taxes, which had a boom, IDR 82.85 billion in VAT and IDR 76.2 billion for transfer of assets from crypto assets until September 2022,” said Sri Mulyani, at the KiTa APBN Press Conference in October 2022.