T

he government is seeking tax treaties with tax haven territories for access to valuable information on Indonesian taxpayers’ money kept in overseas financial centers.

Syarifuddin Alsjah, the director of taxation management, said regarding the tax treaties, he hoped his office would be able to track down Indonesian taxpayers’ money in these tax-haven countries.

“We will work for cooperation with such tax haven jurisdictions. It is important to obtain information on Indonesians who keep their money there,” he said on Tuesday at the Jakarta tax office headquarters.

Several Indonesian businesses have been known to keep money in tax havens such as the Isle of Man, Guernsey, the Cayman Islands, the Bahamas, Costa Rica, Bermuda,
San Marino, Panama and the British Virgin Islands to avoid paying taxes at home.

Due to a lack of data, information and cooperation with several territories, the tax office faced difficulties in their investigation.

Syarifuddin said the tax office hoped to sign agreements with tax havens to obtain information on Indonesians’ funds in the countries. Without such agreements, it will be difficult to obtain the required information because the tax haven territories are blacklisted by major G20 economies, he said.

This year, the government expects to sign agreements with the British Virgin Islands and Panama, Syarifuddin said.

“The agreement outline is in place, so it’s just a matter of ratification. We are arranging for the government, in this case the Foreign Ministry, to support its ambassadors in signing the agreements.”

Indonesia currently has tax treaties with 60 countries, enabling the countries to access and exchange tax information, especially on Indonesians or firms who have their assets in those countries.

The eight tax haven territories had in principal agreed to sign tax treaties with Indonesia, Syafruddin said. He hoped the agreements could be signed this year.

The government expects to receive Rp 839.5 trillion (US$95.7
billion) in tax revenue this year, about 80 percent of the total
state revenue.

Director general of taxation Fuad Rahmany said his office needed to work extra hard to achieve that goal.

“Such a huge target of revenue could only be achieved if the people care and pay their taxes,” he said.

On Tuesday he spoke to over 400 taxpayers and held a conference call with hundreds of other taxpayers from Papua, Bali and North Sumatra to educate them on how to fill in tax declaration forms (SPT).

As of February this year, state income from non-oil and gas taxes reached Rp 93 trillion, or about 11 percent of the overall tax collection target for 2011.

“The tax income has so far been balanced between value added taxes and income taxes. Individual income taxes remain low, but may perhaps start to increase by the end of March,” he added, in reference to the deadline for individual taxpayers to declare their income taxes.

Fuad urged individual taxpayers to pay income taxes before March 31 to help boost state revenue, ensuring that the money will not leak to unscrupulous staff after the recent “cases” at the tax office.

“The system has been quite good and it will not leak anymore. So if people relate their tax payment with Gayus, as if, when we pay taxes our money leaks and we’re taken advantage of by people like Gayus, they’re wrong. The money will go straight into state cash,” he added.