AEOI compliance vital to promote fair tax treatment: Minister
The Jakarta Post
Finance Minister Sri Mulyani Indrawati has warned that failure to comply with the requirements of the Automatic Exchange of Information (AEOI) by the end of June will create hurdles for the government to enforce fair tax treatment on big and small taxpayers.
Sri Mulyani said even with only partial compliance to the AEOI, a global initiative to combat tax evasion, Indonesia would not be able to get reciprocal information from other governments about Indonesian taxpayers’ assets abroad.
"It means that to fulfill the tax revenue, we have to seek mostly from the taxpayers who placed their assets in Indonesia, and we cannot 'catch' the big taxpayers who moved their assets abroad. It will be unfair," Sri Mulyani said on Friday.
(Read also: Higher bar set to improve tax fairness)
To comply with AEOI rule, Indonesia for example, must have legislation that allows the tax office to access financial information from financial institutions for tax purposes, while following the common reporting standard (CRS). As Indonesia stated it would comply with the AEOI by 2018, the requirements must be fulfilled before June 30.
President Joko “Jokowi” Widodo issued earlier this year Presidential Regulation in Lieu of Law (Perppu) No 1/2017 regarding financial information access for taxation purposes. Sri Mulyani also recently issued Finance Ministerial Regulation (PMK) No. 70/2017 as technical guidance for the implementation of the AEOI initiative. (hwa)
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