A twist to Indonesia’s tax amnesty
> Banks in Singapore share with local police names of clients who join scheme
SINGAPORE: Private banks in Singapore are sharing with local police the names of clients embracing an Indonesian tax amnesty, people aware of the matter said, a move that could undermine the amnesty and damage the banks’ business with their biggest client pool.
Singapore’s Commercial Affairs Department, a police unit that deals with financial crime, told banks last year they must file a report whenever a client takes part in a tax amnesty scheme, the sources told Reuters.
After initial resistance from the banks, worried they might lose clients, that message was reinforced this year by the Monetary Authority of Singapore (MAS) when Indonesia launched a tax amnesty aimed at wooing back some of the cash its wealthy citizens have stashed in Singapore, the sources said.
“The moment the client tells you he’s participating in the amnesty, you have a suspicion that the assets with you are not compliant, and so you have to report to the authorities,” said a senior executive at a Singaporebased wealth manager.
Singapore made tax evasion a criminal offence in 2013, and is toughening up the implementation of the law after a money-laundering investigation into state-backed fund 1MDB in neighbouring Malaysia exposed how some of its banks failed to impose robust controls on suspicious money flows.
Indonesians account for an estimated US$200 billion (RM829 billion) of private banking assets managed in Singapore, or 40% of the total. Both the Singapore police and MAS declined to comment.
A second person with direct knowledge of the matter said banks had started sending to the police so-called suspicious transaction reports related to Indonesian clients who have participated in the amnesty regime.
The police website says it has used such filings to detect financial crime.
That means if there is any evidence of wrongdoing from these filings, authorities can further probe clients or banks.