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Indonesia government to give tax office access to banking data soon - tax chief
February 23, 2017 / 8:46 AM / 10 months ago

Indonesia government to give tax office access to banking data soon - tax chief

JAKARTA (Reuters) - The Indonesian government will soon issue a regulation that will give its tax office access to the banking industry’s data on savings accounts, the head of the tax office said on Thursday, as authorities step up efforts to crack down on tax evaders.

The government had already put together a draft that “will allow banking accounts to be opened for tax purposes”, tax chief Ken Dwijugiasteadi said, after attending a coordinating meeting on preparations for Indonesia’s pledge to join the OECD’s Automatic Exchange of Information (AEOI).

The regulation is set to be issued near the time a flagship tax amnesty programme ends in March, he said. The amnesty, announced last year was aimed at flushing out tax evaders and bringing back billions of dollars stashed overseas.

More than 670,000 taxpayers have joined the programme, declaring 4,395 trillion rupiah ($329.11 billion) worth of assets previously not disclosed to authorities.

The government has already proposed to parliament a bill that will give the tax office broader access to banking data, but Indonesia cannot wait for the passage of the bill as it has to meet certain deadlines for the AEOI, officials have said.

It may take a year for parliament to discuss various details of the bill, which also covers general administrations of Indonesia’s tax system, Andreas Eddy Susetyo, a member of a parliamentary committee overseeing the debate of the bill, said earlier this month.

Indonesia’s constitution allows the government to issue a regulation in lieu of law in times of urgency. Such a move is often seen as a way to bypass protracted debate in parliament.

The regulation takes effect immediately, but the country’s parliament must vote on it at the next sitting period. If it votes against it, the regulation will be repealed.

Banks in Indonesia are currently protected by laws that require the tax office to file a request to the banking regulator to get access to a taxpayer’s saving accounts, and only for the purpose of an investigation.

Such process can take more than six months, tax officers have said, complaining that it allows time for non-compliant taxpayer to cover up possible evidence of tax avoidance.

Indonesia will join the worldwide initiative of AEOI in 2018, but it has to get all the regulatory support ready before June 2017, said the finance ministry’s secretary general Hadiyanto.

($1 = 13,354.0000 rupiah)

Reporting by Hidayat Setiaji and Jakarta bureau; Writing by Gayatri Suroyo; Editing by Shri Navaratnam

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