COINHOT – The Indonesian Directorate General of Taxation has decided that it will tax crypto-asset businesses.
The tax is defined as Value Added Tax (VAT) and Income Tax (PPh).
This policy is effective as of May 1, 2022.
What are the reasons for the government to impose VAT and PPH on cryptocurrencies?
Launching indonesia.go.id, one of the reasons the government has imposed VAT and PPh on cryptocurrencies is that cryptocurrency transactions and investors in Indonesia keep increasing from year to year.
Data from the Ministry of Finance, OJK and CoFTRA shows that crypto transactions only reached IDR 64.9 trillion with investors reaching IDR 4 million in 2020.
In 2021, the value of the resulting transaction will rise to IDR 859.4 trillion with investors reaching IDR 11.2 million.
Not only that, from January to February 2022, the realized transaction value amounted to 83.88 trillion rupees, and the number of investors reached 12.4 million rupees.
For governments, transactions and investors generated from cryptocurrencies are exceptional and are naturally subject to Value Added Tax (VAT) and income tax or PPh.
It is also mentioned that crypto-asset transactions will be subject to final PPh rates and VAT.
The provisions relating to this crypto tax are contained in Minister of Finance Regulation (PMK) No. 68 of 2022.
This rule is derived from the Tax Regulations Harmonization Act (UU HPP).
The basis for imposing VAT on cryptocurrencies is that they are considered a commodity included in the VAT component according to the VAT law.
Meanwhile, the basis for imposing PPh on cryptocurrencies is that income from crypto-asset trading is calculated as additional economic capacity that taxpayers receive as regulated by the PPh Act.
“In order to provide legal certainty, simplicity and manageability for the collection, filing and reporting of taxes on crypto-asset trading, it is necessary to make provision for VAT and PPh on crypto-asset trading transactions,” reads the section on consideration of Tuesday’s policy quotes. (5/4/2022).
That is, taxing cryptocurrencies would add to the legitimacy of the industry. This indicates that the cryptocurrency has become an asset or legal good in the eyes of state law.
The head of the Sub-Directorate of Value Added Tax (PPN) for Trade, Services and Other Indirect Taxes, Directorate General of Taxation (DGT) of the Ministry of Finance, Bonarsius Sipayung, stated that the potential state revenue from imposing VAT and PPh on crypto asset transactions starting May 1 2022 is about 1 trillion IDR.
According to him, the prediction is based on the total transactions of crypto assets which amounted to IDR 850 trillion during the year 2020.
Of course there are also those who wonder, why is this cryptocurrency transaction being taxed? First, Bonarsius Sipayung explained that the basis is of course based on VAT law on all shipments of taxable goods and taxable services payable with VAT.
He said in a media briefing in a video conference in Jakarta, Wednesday (6/4/2022) “This is the principle.”
The Directorate General of Taxation stated that trading through the Electronic System (PPMSE) that facilitates crypto assets or physical traders of crypto assets who are not registered with the Futures Trading Regulatory Agency (CoFTRA) will be subject to VAT and PPh rates that are double the rates for registered crypto assets. (Barratut Taqiyyah Rafie)
Source: cash
