Joko signs reg­u­la­tion al­low­ing ac­cess to in­for­ma­tion on ac­counts held at banks

New Straits Times - - Business -


PRES­I­DENT Joko Wi­dodo has signed a new reg­u­la­tion giv­ing tax au­thor­i­ties ac­cess to in­for­ma­tion on ac­counts held at fi­nan­cial in­sti­tu­tions, in­clud­ing banks.

The reg­u­la­tion was signed last week as part of Indonesia’s pledge to join the Au­to­matic Ex­change of In­for­ma­tion (AEOI) ini­tia­tive led by the Or­gan­i­sa­tion for Eco­nomic Co­op­er­a­tion and De­vel­op­ment (OECD), a rich-coun­try think-tank.

The gov­ern­ment con­sid­ered it “very ur­gent” for the tax of­fice to get wider ac­cess to fi­nan­cial data, said the reg­u­la­tion. Fail­ure to meet AEOI com­mit­ments could lead to sig­nif­i­cant losses and dis­rupt sta­bil­ity in South­east Asia’s largest econ­omy, it said.

The pres­i­dent can is­sue a gov­ern­ment reg­u­la­tion in times of emer­gency. It be­comes ef­fec­tive im­me­di­ately, al­though Par­lia­ment must de­bate and vote on the reg­u­la­tion dur­ing its next sit­ting, which starts to­day, to turn it into law. If Par­lia­ment votes it down, the reg­u­la­tion is re­pealed.

The reg­u­la­tion calls on banks, in­sur­ance com­pa­nies and other fi­nan­cial in­sti­tu­tions to re­port client in­for­ma­tion — in­clud­ing cash bal­ances and fi­nan­cial gains from as­sets — as re­quired un­der in­ter­na­tional stan­dards, and for the tax of­fice to share the in­for­ma­tion with au­thor­i­ties in other coun­tries.

The tax of­fice can also ask fi­nan­cial in­sti­tu­tions to share in­for­ma­tion for tax col­lec­tion pur­poses.

Pre­vi­ously, un­der laws pro­tect­ing banks and other fi­nan­cial in­sti­tu­tions, the tax of­fice had to file a re­quest to the Fi­nan­cial Ser­vices Au­thor­ity (OJK) to get ac­cess to a tax­payer’s ac­counts, and only for the pur­pose of an investigation.

The process could take more than six months and in some cases al­low peo­ple to cover up pos­si­ble ev­i­dence of tax avoid­ance, tax of­fi­cers have said.

The new reg­u­la­tion fol­lows an amnesty cam­paign en­cour­ag­ing tax­pay­ers to de­clare hid­den wealth. Al­most one mil­lion tax­pay­ers joined the pro­gramme, declar­ing 4,881 tril­lion ru­piah (RM1.59 tril­lion) of pre­vi­ously con­cealed as­sets.

Joko’s flag­ship nine-month amnesty ended in March. It gen­er­ated 135 tril­lion ru­piah of ad­di­tional tax rev­enue to the gov­ern­ment, equiv­a­lent to 1.08 per cent of gross do­mes­tic prod­uct.

The largest sums amnesty par­tic­i­pants had con­cealed off­shore were held in Sin­ga­pore, the Bri­tish Vir­gin Is­lands, Hong Kong and the Cay­man Is­lands. Reuters

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.