Indonesia Is Considering Taxing Cryptocurrency Trading Amidst a Surge in Interest

Indonesia is now considering a plan to tax cryptocurrency trading after a surge in popularity among local investors, a tax official said on Tuesday. However, it is still at just the discussion stage. Neilmaldrin Noor, a spokesman at Indonesia's tax office said,

“It is important to know that… if there is a profit or capital gain generated from a transaction, the profit is an object of income tax.”

“So the taxpayer who receives capital gain has to pay the tax and report it.”

The Southeast Asian country that has been seeking to shore up state revenues amidst the pandemic has banned the use of cryptocurrencies as payment but allows its trading as a commodity.

Indonesia-based cryptocurrency exchange Indodax reported having hit three million active members on its platform by April, up from around 2.3 million at the beginning of the year.

Indonesia's Financial Services Authority has also been warning investors against the risk of investing in cryptocurrency, arguing its prices are highly volatile and it does not have intrinsic value.

Taxing crypto gains is also gaining popularity in South Korea, where a recent poll showed that over 53% of its citizens support it.

Conducted by Realmeter and commissioned by the news channel YTN, the survey included 500 individuals over the age of 18 years, which reported 60% of women’s support and 47.3% men agreeing to the proposed taxation ruling that calls for a 20% capital gains tax on transactions greater than 50 million won (~$45,000).

Besides working on its central bank digital currency (CBDC), South Korea has been ramping up the efforts to form comprehensive regulation for the crypto asset class as a growing number of Koreans in their 20s and 30s are quitting their jobs and becoming traders.

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