T

he Directorate General of Taxation has stated that data it obtained from financial institutions and banks were confidential and that tax officials who misused such data would be brought to court to face legal prosecution.

The tax office will have access to taxpayers’ financial data, which will be provided by banks and financial institutions as part of the Automatic Exchange of Information (AEOI) agreement.

The AEOI, which is under the supervision of the Organization for Economic Cooperation and Development (OECD), is part of the global effort to combat tax avoidance and tax evasion.

Tax office spokesman Hestu Yoga Saksama said the office had a zero tolerance policy against tax officers who abused their authority by using the data for personal gains.

“We will not tolerate tax officers who intimidate [taxpayers]. If taxpayers experience such [intimidation], do not hesitate to report it to our whistleblowing system,” Hestu said in Jakarta on Tuesday.

He added the tax office would continue its efforts to improve the integrity of its officials in order to prevent such cases from happening in the first place.

Moreover, Hestu said the tax office would carefully safeguard the data and only use it for taxation purposes, citing a stipulation in the existing General Taxation System (KUP) Law that tax officers who leak taxpayer data would face legal prosecution.

Article 41 of Law No. 16/2000 — the second amendment of the KUP Law — stipulates that tax officers could face a maximum of one year in prison as well as a fine of up to Rp 4 million if they accidentally leak taxpayer data.

If tax officers intentionally leak taxpayer data, they could face up to two years in prison and a maximum fine of Rp 10 million.

However, Center for Indonesia Taxation Analysis (CITA) executive director Yustinus Prastowo said the current stipulations were not sufficient, as taxpayers needed more guarantees that their data would not be leaked.

“The punishments specified in the current legislation are not severe enough and also lack details,” he said, while comparing it to the punishment faced by authorities from financial institutions that refuse to submit their data.

The 2017 Financial Disclosure Law, which serves as a legal basis for Indonesia’s participation in the AEOI, stipulates that authorities of financial institutions that refuse to report their customers’ data will face up to one year’s imprisonment in addition to a Rp 1 billion fine.

Traditional financial institutions, such as banks, insurance firms and security funds, among other institutions, are obliged to submit their domestic customers’ data to the tax authority by the end of April at the latest.

The same due date also applies for foreign customers of non-traditional financial institutions, which includes financial technology (fintech) firms.

Meanwhile, the data of foreign customers of traditional financial institutions should be submitted to the Financial Services Authority (OJK) by Aug. 1 at the latest, before the OJK submits its reports to the tax office by Aug. 31.

Hestu added only relevant authorities within the tax office were granted access to the financial data in an effort to prevent leaks as well as misuse of data.

“In the tax office’s headquarters, for example, only the tax revenue and compliance director will have access to the data. If there is any indication of taxpayers’ non-compliance, the data would then be handed over to the regional office, where only the regional office head would have access to it”, he said.

CITA’s Yustinus also concurred with Hestu, saying that by giving access only to a

limited number of tax officials, it would help mitigate the potential for abuse.