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heated exchange of claims has emerged between Indonesian and Singaporean officials, revolving around Singapore’s alleged attempts to prevent Indonesians from repatriating their funds and joining the tax amnesty program.

According to testimony from Indonesian businesspeople, top state officials have claimed that the Singaporean government and its banks are taking measures to prevent Indonesian citizens’ funds from leaving the country, such as by cutting tax rates, offering zero percent interest on loans and even Singaporean citizenship.

However, the Singaporean government has refuted Indonesia’s claims, stating that neither the neighboring state nor its banks have attempted to offer Indonesian citizens incentives to keep their assets in the country.

“Recent claims that Singapore is implementing policies to ‘thwart’ Indonesia’s tax amnesty program are untrue,” the Singaporean Embassy in Jakarta told The Jakarta Post in an email.

Indonesia’s tax amnesty program, which will run until next March, is expected to see Rp 1 quadrillion (US$76 billion) repatriated in exchange for low penalty rates of between 2 percent and 10 percent.

Finance Minister Bambang Brodjonegoro said last week that he believed Indonesian taxpayers with assets parked in Singapore, where many wealthy Indonesians have stashed funds for years, would repatriate all their assets, saying that “our taxpayers are nationalists who love Indonesia more than other countries”.

Bambang reportedly said he was “not afraid of Singapore, which is just a small country”, prompting Singapore’s Law and Home Affairs Minister K. Shanmugam to voice his objections on social media.

“I don’t understand why there is this constant attempt to put us down and taunt us,” Shanmugam said in a Facebook post on Saturday. “Yes, we are a little red dot. We may be small. But we are respected and successful. And our people lead meaningful lives. And we don’t live in fear of anyone else.”

He wrote that Singapore had maintained a strong friendship with Indonesia for the last 50 years, cooperating on many matters, and that both countries had benefited from these good relations. “But every now and then, someone in Indonesia will tell us that we should know our place, a little red dot,” he added.

A previous report said Rp 3.14 quadrillion in Indonesian funds were parked abroad to evade taxes, and that Singapore was among preferred destinations, according to government data. There are 903 accounts in Singapore under the names of Indonesian businesspeople, the data said.

Indonesian Chamber of Commerce and Industry (Kadin) chairman Rosan Roeslani was among businesspeople who had been allegedly “privately approached” by a fund manager from Singapore regarding incentives in the form of higher interest rates for funds stored in the city-state.

“They will increase interest rates in the hope that their Indonesian clients will only declare their assets and, instead, cancel their plans to bring their money back to Indonesia,” Rosan told the Post on Sunday.

Indonesian Employers Association (Apindo) chairman Hariyadi Sukamdani mentioned a recent Singaporean lender OCBC Bank advertisement offering a “July 2016 promotion” for an interest rate of 4.88 percent on three-month Singapore dollar time deposits. However, it is not specifically addressed to Indonesian businesspeople keeping their assets in Singapore.

“This kind of effort is not enough, because, in fact, they are excited to apply for the amnesty and repatriate their assets,” Hariyadi said.

As of Friday, the fifth day of the tax amnesty program’s full implementation, Rp 400 billion had been declared, mostly onshore funds, according to tax office data. (mos)