The Indonesian tax authorities will impose income tax on capital gains from cryptocurrency investments and a value-added tax (VAT) on cryptocurrency purchases — at 0.1% each — starting from May 1, as the industry sees a boom in the country, according to Reuters.

In a local media briefing, Hestu Yoga Saksama, director of tax regulations for the Ministry of Finance, said, “crypto assets will be subject to VAT because they are a commodity as defined by the trade ministry. They are not a currency.” 

“So we will impose income tax and VAT,” he added. 

The 0.1% capital gains tax matches the rate that Indonesian investors pay for stocks.

The largest Southeast Asian economy saw a grappling interest in cryptocurrency assets such as Bitcoin BTC/USD Ethereum ETH/USD, and Dogecoin DOGE/USD during the COVID-19 pandemic. By the end of 2021, the number of cryptocurrency holders was as high as 11 million in Indonesia, as per Reuters.

This came after another Asian country — India — began taxing profits from cryptocurrency assets at 30% without allowing loss offsets or deductions, earlier this month, in addition to a 1% tax deducted at source on all cryptocurrency transactions.