President Joko “Jokowi” Widodo’s administration will take advantage of an opportunity to scrap long-standing bank secrecy policies, which is expected to boost the tax reform program and increase the tax ratio, after adopting new global standards on the Automatic Exchange of Information (AEOI), which will be implemented in September 2018.

However, the AEOI requires Indonesia to amend five existing laws, namely the Banking Law, the Sharia Banking Law, the Capital Markets Law, the Microfinance Law and the General Taxation System Law. The supportive rules must also be in place before June 30.

As the clock ticks toward the implementation of the AEOI, the government and the House of Representatives have a diminishing chance to complete all the necessary work by the end of June, leading them to prepare a regulation in lieu of law (Perppu) — which is equal to a law and can only be issued in urgent cases.

“It seems that we cannot finish the revised laws by June. The House is also entering recess soon, so we are thinking of issuing a Perppu because it is now urgent,” Law and Human Rights Minister Yasonna Laoly said after a limited meeting at the State Palace on Wednesday.

Endorsed by the Organization for Economic Cooperation and Development (OECD) and the G20, of which Indonesia is a member, the AEOI scheme binds its participants to automatically exchange taxpayer information, such as addresses, bank account details and asset purchases in other countries.

Some 101 jurisdictions have committed to implementing the AEOI standards, with 54 of them ready to implement them in 2017, including the United Kingdom, India, the British Virgin Islands and Cayman Islands, while the remaining 47 countries including Indonesia, Singapore and Hong Kong will implement them in 2018.

Given the tight deadline, Finance Minister Sri Mulyani Indrawati has said the government is now prioritizing the revision of the General Taxation System Law over the other four laws.

“We will try to include as many clauses as possible in the draft General Taxation System Law revision to build in access to information related to taxation that meets the AEOI requirements,” she said, adding that the government had registered the draft in the National Legislation Program (Prolegnas) to be discussed with lawmakers this year.

Meanwhile House Legislation Body (Baleg) member Misbakhun of the Golkar Party, who is also a member of Commission XI overseeing finance, expressed his optimism that it would be deliberation of the Banking Law revision that could be finished in time. The Banking Law fully protects data confidentiality of bank customers, except for purposes such as criminal investigations or tax scrutiny that have been authorized by the finance minister and approved by the Bank Indonesia (BI) governor.

“The draft Banking Law revision has a high chance of being discussed this year. It already has a slot in Prolegnas, currently the working committee of Commission XI is working on the draft,” he told The Jakarta Post.

The AEOI implementation will be the next step in the country’s efforts to improve tax compliance when the tax amnesty ends on March 31. With more than Rp 4 quadrillion (US$300 billion) in declared assets from the tax amnesty, the country’s tax authorities will have an extra tool to verify taxpayer data when the time comes for openness in bank accounts.

OCBC NISP president director Parwati Surjaudaja said the banking industry generally welcomed the AEOI standards, as banks complied with the United States Foreign Account Tax Compliance Act (FATCA) and had regularly sent information about US citizens’ bank accounts to the US government since 2013.

“In principal, the AEOI is similar to FATCA. Internally we are ready but still await detailed rules from the government regarding the type of data,” she told the

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