Jakarta. Oscar Darmawan, CEO of the crypto exchange Indodax, is urging the Indonesian government to review the tax rates imposed on crypto assets, arguing that the current tax structure is hindering the industry's growth.

"There are currently various types of crypto asset taxes in Indonesia, including a 0.10 percent income tax, a 0.11 percent value-added tax (VAT), and an additional 0.02 percent for exchange, deposit, and clearing fees. Moreover, if transactions involve stablecoins like USDT, additional tax multiplication is applied. The variety of taxes imposed results in a high total tax burden for investors, potentially stifling the crypto industry in Indonesia,"  Oscar said on Friday.

Crypto taxes were implemented in May 2022, and the government collected crypto taxes amounting to Rp246.45 billion ($15.87 million) as of December 2022.

Oscar highlighted the disproportionality of the current crypto industry tax rates compared to stock market taxes. "Stock taxes, for instance, amount to only 0.1 percent. Therefore, it would be better if crypto investors in Indonesia were exempted from VAT, as is the case in the stock industry," suggested Oscar.

He also pointed out that foreign exchanges operating in Indonesia should be subject to taxes, yet this has never been invoiced by the Directorate General of Taxes (DJP). Meanwhile, the domestic crypto industry is grappling with survival due to compliance with the existing tax regulations.

"There is concern that well-intentioned tax regulations may trigger capital outflow from the Indonesian crypto industry. Additionally, 2024 holds many important moments for the crypto industry, such as bitcoin halving day," warned Oscar.

He believes that the historical significance of Bitcoin halving day will likely drive global growth in crypto assets, including in Indonesia. Bitcoin halving is an event that occurs approximately every four years as part of the Bitcoin protocol. It refers to the reduction in the reward that Bitcoin miners receive for validating and adding new blocks to the blockchain. 

"Many people are eagerly anticipating bitcoin halving day as prices of bitcoin and other crypto assets historically experience significant increases. Therefore, many people are interested and eager to start investing in crypto assets, especially before halving day, which can stimulate the growth of the crypto industry," Oscar said.

According to data from the Commodity Futures Trading Regulatory Agency (Bappebti), the total number of cryptocurrency investors in Indonesia reached 18.25 million people as of November 2023. This marked an increase of 1.05% compared to October 2023 when there were 18.06 million investors.

Meanwhile, the value of cryptocurrency transactions in Indonesia surged by 62.8% to Rp 17.09 trillion in November 2023 compared to the previous month. The total accumulation reached Rp 121.99 trillion by November 2023.