Tax Shake-Up Hits Traders and Exchanges
Indonesia is cranking up the pressure on its crypto sector starting August 1, introducing a wave of new tax rules and tighter regulations that impact traders, miners, and exchanges. The changes, under Ministry of Finance regulations No. 50/2025 and No. 53/2025, will double most tax rates and add new burdens for operators—especially those dealing through foreign platforms.
For those trading Bitcoin and other cryptocurrencies on local exchanges, the income tax rate jumps from 0.1% to 0.21%, a 110% hike that hits both casual and professional users. Meanwhile, selling on offshore exchanges becomes significantly more expensive, with the tax rate surging from 0.2% to 1%. The move is a clear effort to drive trading volumes toward domestically regulated platforms by making foreign ones less appealing.
Miners Face Double Trouble and 2026 Deadline
Crypto miners are also squarely in the crosshairs. The VAT on mining services rises from 1.1% to 2.2%, cutting into profits amid already volatile price movements. Even more significantly, by 2026, the government will scrap the special 0.1% flat income tax and instead classify miners as “taxable retail entrepreneurs.”
This means that mining operators will need to report income using standard personal or corporate tax brackets, bringing increased accounting complexity and higher liabilities. Authorities have warned of stiff penalties for those failing to comply, urging all miners to update their tax status immediately.
A Small Win: VAT Exemption for Specific Trades
Despite the tax hikes, the government is offering a carrot alongside the stick. The new framework exempts VAT for trades involving crypto assets “equivalent to securities.” While the exact scope of this exemption remains vague, it’s a welcome relief for both retail and institutional traders.
Previously, VAT charges ranging from 0.11% to 0.22% applied to most digital asset purchases. The removal of this cost from select transactions not only reduces fees but also brings more clarity to how crypto is classified under Indonesian law.
Domestic Exchanges Get a Boost, Foreign Ones Squeezed
Indonesia has been moving steadily toward a more controlled and transparent crypto sector, and these latest moves are part of that effort. The harsh new rates for offshore exchanges will likely push more users toward local platforms, boosting their volumes and potentially making them more competitive internationally.
But the double burden of VAT and income tax—especially for small players—risks driving informal activity underground. If the new taxes are too heavy-handed, some users may simply go peer-to-peer or shift to decentralized platforms to avoid scrutiny.
Global Ripple Effects and Regional Rivalry
The crypto tax reform is being viewed as a test case for global regulators. Indonesia is opting for selective legalization: applying higher taxes where crypto adoption is mature and removing friction where the ecosystem needs support.
Still, regional competitiveness is a real risk. Neighboring countries like Singapore and Malaysia offer more crypto-friendly conditions, raising the chance that businesses will relocate. In the coming months, eyes will be on trading volumes, mining viability, and foreign investment trends to measure the fallout—and whether Indonesia’s crypto ambitions are still on track.
