The Indonesian government recently announced a significant adjustment to its encryption tax policy, a change that will have a profound impact on various participants in the encryption market, especially those who have been engaged in related activities in the Southeast Asia region for a long time.

This new policy will be implemented starting in 2026, mainly involving transaction taxes and mining taxes.

In terms of trading, sellers will face a significantly increased tax burden. The seller tax rate on domestic exchanges will be raised from 0.1% to 0.21%, while the seller tax rate for trading on overseas platforms will skyrocket from 0.2% to 1%. This means that selling cryptocurrency worth $10,000 on an overseas platform will see tax fees surge from $20 to $100, greatly increasing the cost of trading.

However, there are also some positive changes on the buyer's side. The new policy has removed the previous value-added tax of 0.11%-0.22%, which has somewhat alleviated the burden on buyers. However, considering the significant increase in sellers' tax burden, it remains to be seen whether this cost will ultimately be passed on to buyers, and this is still worth close attention from the market.

The impact of the new policies on the cryptocurrency mining industry is more pronounced. The value-added tax rate has been raised from 1.1% to 2.2%, while the original 0.1% special income tax has been abolished and replaced with taxation based on individual or corporate income tax rates. For enterprises, Indonesia's 22% corporate income tax combined with the 2.2% value-added tax results in a total tax burden of 24.2%. This change may force many small and medium-sized mining operations to reassess their operational strategies and even consider relocating their business to countries with lower tax burdens, such as Thailand or Malaysia.

In light of this policy change, industry insiders recommend that participants engaging in cryptocurrency-related activities in Indonesia should prioritize using domestic compliant exchanges. Although tax rates have increased, they are still more advantageous than the 1% tax rate of overseas platforms. For users accustomed to using overseas platforms, careful cost calculation is necessary to avoid blind operations. As for mining practitioners, they should either seek ways to optimize costs or consider exploring the policy environment of neighboring countries to cope with the pressure brought by high tax burdens.

It is worth noting that Indonesia has become increasingly strict in its regulation of cryptocurrency in recent years, and this tax reform also reflects the government's intention to bring this sector under formal management, which can both increase tax revenue and mitigate risks. For ordinary participants, compliance with regulatory requirements is crucial to avoid unnecessary legal risks.

As 2026 approaches, market participants have some time to adjust their strategies and adapt to the new policy environment. This change will undoubtedly reshape the cryptocurrency ecosystem in Indonesia and the Southeast Asia region, and its long-term effects are worth ongoing attention.