Indonesia Tightens Crypto Tax Grip: Offshore Platforms Face Steeper Hikes Starting August 2025
Jakarta turns the screws on digital asset traders with aggressive new tax policies targeting foreign exchanges. Local investors brace for impact as offshore platforms get hit hardest.
The move—seen by analysts as both revenue play and protectionist maneuver—comes as Indonesia's crypto adoption surges despite regulatory headwinds. Domestic exchanges breathe sigh of relief while competitors face 20-30% higher levies.
Finance ministry insiders claim the measures will 'level the playing field.' Crypto veterans call it old-fashioned protectionism dressed in Web3 clothing—because nothing says 'decentralized future' like good ol' tax arbitrage.
Tax hike could push crypto activity offshore
Maryna Kovalenko, director and co-founder of Brisbane-based crypto tax advisory firm Kova Tax, told Decrypt that removing buyer VAT "lowers transaction costs and simplifies new investors' experience," but warned the tax increases "could deter frequent retail traders or high-volume flows."
Even Alex Chandra, partner at Indonesia-based law firm IGNOS Law Alliance, told Decrypt that the tax hike “will raise transaction costs slightly” and “may push some activity to offshore platforms.”
He noted that local exchanges already used to tax collection “should manage the changes,” but will need to strengthen reporting systems and ensure compliance with OJK's supervisory requirements.
Chandra called the 1% tax for cross-border transactions the “most significant change,” but emphasized that its success hinges on enforcement. “It could deter Indonesian users from transacting on global platforms or prompt them to seek non-compliant alternatives,” he said.
The Ministry of Finance can appoint foreign platforms with high Indonesian traffic to collect the 1% tax; if not, the obligation shifts to the users themselves, Chandra added.
“The implementation is quite weak for cross border," he said, noting that there is "no strong reasoning" for foreign platforms to comply.
Chandra was skeptical about enforcement, saying the government might not be able to track crypto due to its “decentralized nature” as it does with bank accounts.
Indonesia and crypto taxes
Indonesia's crypto tax evolution began with treating digital assets as commodities under commodity regulator Bappebti.
The government first introduced crypto taxation on May 1, 2022, implementing dual taxation with 0.1% income tax and 0.11% VAT on domestic platforms, while unregistered exchanges faced 0.22% VAT.
However, crypto tax revenue fell 63% in 2023 despite Bitcoin's 159% surge, as transaction volumes dropped 51% and users increasingly turned to offshore platforms to avoid higher fees.
