Even at the beginning of the year, fintech and crypto have contributed promising tax revenues to the Indonesian government.
What’s New:
The Ministry of Finance (Kemenkeu) has collected a total of IDR 71.72 billion from crypto and fintech taxes, according to Director General of Taxation Suryo Utomo.
IDR 39.13 billion was collected from crypto taxes, comprising IDR18.25 billion from income tax (PPh) Article 22 and Rp20.88 billion from value-added tax (PPN) on crypto transactions in January 2024. Additionally, the government garnered IDR32.59 billion from fintech taxes in the same period.
The revenue from fintech taxes includes IDR20.5 billion from PPh Article 23 and IDR12.09 billion from PPh Article 26.
Behind the News:
Crypto and fintech taxes are regulated under Law Number 7 of 2021 concerning Tax Regulation Harmonization (UU HPP). However, they were only enforced by the government starting in 2022 after the issuance of derivative regulations.
The Ministry of Finance issued technical implementation regulations in the form of Minister of Finance Regulation (PMK) Number 68/PMK.03/2022 for crypto taxes and PMK Number 69/PMK.03/2022 for fintech taxes. These regulations came into effect on May 1, 2022.
Why It Matters:
The significant revenue generated from crypto and fintech taxes highlights the growing importance of these sectors in the economy and the government’s efforts to ensure tax compliance within them.
The issuance of specific regulations provides clarity and guidance for taxpayers and businesses operating in the crypto and fintech industries, promoting a more transparent and regulated environment.
What We Are Thinking:
The substantial tax revenue collected in January 2024 alone prompts consideration of the potential long-term impact of crypto and fintech taxation on government finances and the broader economy. The increasing growth of fintech and investment-savvy individuals, both in fintech and crypto, will contribute to the growth of the national economy.
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