Pros & Cons of Crypto Transaction Tax Policy in Indonesia

Cryptocurrencies grew in the world after in 2009 Bitcoin appeared for the first time and was introduced as the world's first traded coin. Meanwhile in Indonesia, cryptocurrencies have become popular a few years ago. It happened when the early altcoins after Bitcoin (such as Litecoin, Ethereum, Dogecoin and Dash) came to the fore. From here, many new miners are mining bitcoin and its derivatives. Then, some of those who have small capital can only collect from faucets that have varying values on each coin. Then, a local exchange platform developed that helped the stability, popularity or credibility of buying and selling in local markets in Indonesia such as Indodax, Tokocrypto, Triv and Rekeningku.com.

Now the era of cryptocurrency transformation is different. We are in the investment stage with more diverse terms such as DApps, Staking, DeFi and Play To Earn (Game). So, the previous terms such as trading, faucet and mining aren't foreign for now because they have been introduced first. The more ways to earn, the more people who want to participate and expect the same benefits as those who have participated first.

This is what the government pays attention to making tax rules related to cryptocurrencies because they try to mediate on transactions made by cryptocurrency players or investors. If this rule has been set on each crypto exchange in Indonesia, then the tax fee has been combined with the trading fee in every buy and sell transaction made on the exchange.

In this case, it has been stated in the regulation of the minister of finance (PMK No. 68 of 2022) that there are two directions in tax collection by the government, namely the exchange of Rupiah currency with cryptocurrencies (or vice versa). The second, taking taxes from crypto exchanges with other cryptos (for example between Bitcoin and Litecoin or vice versa). The tax value stated in it is a value-added tax (VAT or PPN in Indonesia) of 0.11 percent per transaction and income tax (PPh) of 0.1 percent per transaction. But, if the transaction occurs outside the crypto platform, it will be charged double the value above.

If you look confused, let's try to do the calculations clearly. In this case, we use the exchange Rekeningku.com. We will try to calculate from rupiah to crypto.

Exchange Crypto to Rupiah (or Vice Versa)

For example for a sell transaction: On March 3, 2022. You want to sell bitcoin for 0.4 BTC where the current unit price is 600.000.000 IDR (Indonesian Rupiah).

So, we use the formula:

”trading fee : 0.1% + PPh: 0.1% x (your crypto amount x coin unit price)”

Then, we will enter the numbers above:

0.2% x (0.4 BTC x 600.000.000 IDR) = 480.000 IDR (the fee you have to pay)

Then, an example of a buy transaction: On March 4, 2022. You want to buy bitcoin for 0.3 BTC where the current unit price is 500.000.000 IDR

So, we use the formula:

“trading fee: 0.1% + (PPN: 1% x 11% = 0.11%) x ( your crypto amount  x coin unit price)"

Then, we will enter the numbers above:

(0.1% + 0,11%) x (0.3 BTC x 500.000.000 IDR) = 150.165 IDR (the fee you have to pay)

Crypto to Crypto (Exchange or Swap)

 For example: On March 7, 2022. You traded 0.4 crypto A (Michael) for 20 crypto B (Brian). With a crypto exchange rate into rupiah of 6.000.000 IDR

The amount of tax imposed on Michael :

1. From submission on crypto A, the amount of tax charged is :

(trading fee: 0.1% + PPh: 0.1%) x (amount of crypto x unit price)

Here, we will enter the value:

0.2% x (0.4 x 6.000.000 IDR) = 4800 IDR

2. From the receipt of crypto B, the amount of tax charged is :

(trading fee: 0.1% + [PPN: 1% x 11%=0.11%]) x (amount of crypto x unit price)

Here, we will enter the value:

(0.1% + 0.11%) x (20 x 6.000.000 IDR) = 120.132 IDR

So, the total amount of tax that must be paid by Michael is 124.932 IDR

Meanwhile…

The amount of tax imposed on Brian :

1.  From the receipt of crypto A, the amount of tax charged is :

(trading fee: 0.1% + [PPN: 1% x 11%=0.11%]) x (amount of crypto x unit price)

Here, we will enter the value:

(0.1% + 0.11%) x (0.4 x 6.000.000 IDR) = 2403 IDR

2. From submission on crypto A, the amount of tax charged is :

(trading fee: 0.1% + PPh: 0.1%) x (amount of crypto x unit price)

Here, we will enter the value:

0.2% x (20 x 6.000.000 IDR) = 240.000 IDR

So, the total amount of tax that must be paid by Brian is 242.403 IDR

Based on the sample data above, if we have 4-5 transactions, then that's quite a lot of fees that users will use. So, it is quite detrimental to the user if he has a lot of digital assets on the local exchange. Meanwhile, the positive side is this policy makes crypto players more legal in carrying out their business. I mean, there are still many people in Indonesia who don’t understand the cryptocurrency business so they think that this is illegal.

I hope that with the fees on local exchanges, this business gets the same legal protection as banks. Although I regret that these fees are quite burdensome and the crypto world isn’t as ideal as its mission where no single person or group intervenes in cryptocurrencies transactions.

Image Sources :
1. Unsplash | Markus Winkler (as a lead image)
2. Rekeningku.com Official on Facebook