Heaptalk, Jakarta — The volume of crypto asset trading transactions declined last year. Previously, the crypto transaction volume of this asset reached US$54.9 billion, or around Rp859.4 trillion in 2021. This output also continues to decrease by up to 63%, becoming US$19.5 billion, approximately Rp306.4 trillion last year, and is still experiencing a decline, becoming US$6.02 billion (around Rp94.4 trillion) until September 2023.
In response to this issue, Indonesia’s Financial Service Authority (OJK) conveyed that the stipulated high tax policy is the primary factor in the decline of crypto asset transactions. As is well known, OJK has issued Value Added Tax (VAT) and income tax (PPh) since May 1, 2022. However, this regulation’s implementation has caused the transaction volume to decrease in the last three years.
The Chief Compliance Officer (CCO) of Reku, who also served as the Chairman of Aspakrindo, Robby, admitted that tax implementation in Indonesia is relatively large compared to other countries. In his further statement, Robby explained that the final VAT value collected and deposited touched 1% of the general VAT rate of 0.11%.
Meanwhile, he delivered that other markets, such as Malaysia, Singapore, Thailand, Australia, and Brazil, do not implement VAT on crypto assets. As an effect, he revealed the high burden investors bear would influence a significant capital outflow.
“As an exchange player, we have received grievances from users regarding this tax implementation since last year, encouraging crypto asset investors to switch to foreign exchange platforms. Moreover, the global exchange platform targeted by crypto investors still needs to manage a license in the archipelago, which might harm business actors and investors in the crypto ecosystem,”
Despite the decline in transaction volume in Indonesia, Robby said investors showed optimism about the market by performing the hold on for dear life (HODL) strategy, known as the crypto asset holding strategy. The increase in investors’ preference to keep their assets is due to prices being in the green zone and the increasing scarcity of several crypto assets, especially BTC and ETH.
“Currently, more than 93% of Bitcoin has been mined, and the amount of Ethereum has also decreased due to Enthereum’s transition to a PoS consensus system. The enhancement of scarcity value on BTC and ETH makes investors decide to keep their crypto assets. This trend also shows their confidence to undergo the coming bullish phase.” said the Crypto Analyst of Reku, Fahmi Almuttaqin.
According to Fahmi, the crypto market will likely commence speculating on the ETF Bitcoin Spot decision proposed by Franklin and Hashdex, with the deadline on November 17th, 2023, and a ETF Bitcoin Spot submitted by Global X with a second deadline of November 21st, 2023.
Responding to market optimism, Robby expects real action to prevent crypto investors from transacting on unregistered foreign exchange platforms. He also looks forward to further discussions of the high tax policy between industry players, associations, and regulators, which is expected to discover solutions in implementing ideal crypto regulations in Indonesia.
