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Regulation against bank secrecy to affect only foreign clients initially
A government regulation in lieu of law (Perppu) aimed at reducing bank secrecy as part of a global initiative to fight tax evasion will only apply to banks’ foreign customers in the first stage of its implementation.
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The Directorate General of Taxation's international taxation director, John Hutagaol (left), speaks at an event. (JP/Wendra Ajistyatama ) (JP/File)
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government regulation in lieu of law (Perppu) aimed at reducing bank secrecy as part of a global initiative to fight tax evasion will only apply to foreign customers in the first stage of its implementation.
A Perppu is equal to a law and can only be issued in urgent cases. In this case, the Perppu is part of the government’s efforts to comply with the Automatic Exchange of Information (AEOI), a global initiative that defines new standards for fighting international tax evasion.
The AEOI requires the elimination of bank secrecy, which still exists in Indonesia’s banking law.
(Read also: Banking secrecy scrapped in May 2017)
“Then it [the Perppu] is ready, it will be [implemented] for foreign customers in the form of individual and institutional taxpayers,” said John Hutagaol, international taxation director at the Directorate General of Taxation, after a seminar on the AEOI on Friday.
Meanwhile, Financial Services Authority (OJK) chairman Muliaman D. Hadad said the OJK, which oversees banking and the financial industry, was currently preparing a circular for banks to support the Perppu implementation, which is expected to take effect in May.
“We will issue the common reporting standard [CRS] through an OJK circular, which is almost complete and probably will be ready by the end of March,” he said.
The common reporting standard covers a mechanism at banks related to foreign customers, including those that should lay open their data for taxation purposes. (bbn)
