New Tax Policy Aims to Streamline Gold Transactions
The Indonesian government has introduced a new tax policy on gold bullion transactions, implementing a 0.25 percent Article 22 income tax on purchases made by bullion banks. This significant regulation, which took effect on Friday, August 1, 2025, is designed to streamline the taxation framework for gold and applies to both domestic transactions and imports, but explicitly exempts end consumers. The new rules, detailed in Minister of Finance’s Regulations (PMK) No. 51 and No. 52 of 2025, were created to address the problem of overlapping tax collections that existed under previous provisions. Prior to this, a lack of specific regulations led to a burdensome double-taxation issue for businesses. For example, while gold sellers were required to charge a 0.25 percent tax on sales to bullion banks, the banks themselves were also mandated to charge a higher 1.5 percent tax on the same transaction, creating an inefficient and complex system that was a source of frustration for market participants.
Lowering the Tax Burden and Leveling the Playing Field
Under the new PMK 51 of 2025, the government has streamlined the process by designating bullion financial institutions as the sole collectors of the 0.25 percent Article 22 income tax on gold bullion purchases. This new and significantly lower rate is a major reduction from the previous 1.5 percent, which effectively lowers the tax burden on these financial institutions and is expected to provide a more competitive environment for gold trading. In addition to reducing the tax rate, the new regulation has also done away with the tax exemption scheme that previously applied to bullion imports. By removing this exemption, the government has ensured that both imported and domestically purchased gold are now taxed under the same consistent framework. This change is designed to create a more balanced and fair market for all participants, preventing companies from favoring imported gold due to a tax advantage and promoting a more level playing field.
Key Exemptions for Consumers and Small Businesses
The new tax policy is not intended to burden individual consumers or small businesses, a fact that is clarified in the provisions of PMK 52 of 2025. This regulation specifies a number of important exemptions from the Article 22 income tax on gold transactions. Most importantly, the tax will not be applied to sales of gold jewelry or bullion to end consumers. The exemption also extends to micro and small business taxpayers, individuals holding specific tax exemption certificates, and transactions involving bullion sales to Bank Indonesia. Furthermore, purchases made through digital gold markets will also be exempt. As explained by the Director of Tax Regulations, the new policy is specifically designed to target commercial transactions rather than individual purchases. This measure ensures that the new tax burdens producers and traders while protecting consumers from additional costs, thereby providing a clear distinction between business-to-business transactions and sales to the public.
