Starting 1 May 2022, the government will impose value added tax (VAT) and income tax (PPh) on crypto transactions. This decision is stipulated in Minister of Finance Regulation (PMK) Number 68 of 2022.

This news was confirmed by Director of Tax Regulations I at the Directorate General of Taxes Hestu Yoga Saksama. He said that crypto asset transactions are subject to tax because crypto is not a means of payment.

“Crypto is subject to VAT as well. Why? Because it's not money. The Indonesian Stock Exchange never said it is a means of payment. The Ministry of Trade's Bappepti (called crypto) a commodity," said Hestu.

He added that the purpose of imposing final VAT on crypto assets is to provide convenience for taxpayers. "Later on, those that are subject to the VAT are called exchanger. Final VAT 0.1%," Hestu at a media briefing on 1 April.

Tax imposition on crypto asset transactions is based on Law Number 7 of 2021 concerning the Harmonization of Tax Regulations (HPP).

Sellers will also be subject to Income Tax Article 22 which is final at a rate of 0.1%. Income Tax Article 22 is final and is collected, deposited and reported by the trade player. If the electronic commerce system provider is not a physical trader of crypto assets, Income Tax Article 22 rate that will be collected is 0.2%.

Regarding the tax imposition, Hestu ensured that the government would regulate it as simply as possible and provide legal certainty to those who cut, collect and report the final VAT.

"We are implementing the final VAT. We will regulate the imposition, the simplicity of calculating taxes and depositing them," he said.