JAKARTA (TheInsiderStories) – The Indonesian government continues to ensure that citizens or legal entities comply with tax regulations and not commit to tax evasion or other economic crimes.
One of them was the tax amnesty program in 2016. But the project was unsuccessful. Indonesian assets that turned into the country were far below than government estimates.
Indonesia turned-head by starting an information exchange collaboration by signing a joint declaration with Switzerland regarding Automatic Exchange System of Information (AEoI) in 2017 to hunt the tax fraud to comply with tax regulations.
The cooperation with Switzerland was continued when the two countries agreed to sign a mutual agreement on late Feb. 4, 2019.
The Indonesian-Switzerland mutual legal assistance (MLA) agreement actually began in 2008. After several bilateral meetings, finally Switzerland agreed to reciprocal assistance in criminal matters.
The government first chose Switzerland as an economic intelligence partner because the country been known to be a haven for the global economic crime players, such as the financial mafia, arms traders, corrupt officials and tax evaders.
Reuters reported, there were around US$2.3 trillion of global assets on save in Switzerland. Recently, the United States (US) has accused one of the Swiss banks of helping smuggle thousands of people from the target of the tax authorities’ inspection through the opening of bank accounts at the save heaven country.
But since 2005, the attractiveness of Switzerland as a tax heaven has dropped from 44 percent of the global portion to 28 percent in 2015. This caused by the revealed the case of embezzlement of Swiss banking.
In addition, there is an initiative of the Swiss government to collaborate with other countries to relax secrecy for the financial transparency of bank customers. Switzerland has also been included in 153 countries that are committed to exchanging information regarding tax interests.
In the MLA, there are at least 39 articles that govern the reciprocal relations between the two countries. Among them are arranging legal assistance regarding tracking, freezing, confiscation to seizure of assets resulting from crime, and tax crimes or tax fraud.
The contents agreement are confident to benefit Indonesia, especially narrowing the space for the perpetrators of crimes who want to hide the proceeds of their crimes abroad.
Moreover, this agreement is also a warning to corruptors, tax evaders and narcotics syndicates not to channel funds suspected of being proceeds from crime to Switzerland.
With that, there is a solution to the issue of jurisdiction in law enforcement, where Indonesian law enforcement officers more easily access information about the escape of assets resulting from crime to Switzerland.
The MLA stated that Indonesia can request Swiss assistance to make a forced effort against perpetrators of crimes such as searches, blocking accounts, or opening a suspected bank account. For other non-forced efforts, Indonesia can also request data on company lists that are allegedly related to money abstersion.
It can be done as long as there is consistent cooperation and synergy between between the Indonesian anti-graft, Directorate General of Taxes, the Police and the Deposit Insurance Corporation (DIC).
DIC itself welcomed the Government’s move to pursue Bank Century’ assets which in 2015 allegedly fled to Switzerland and Hong Kong for $161.6 million, of which had $156 million in Switzerland and $5.6 million in Hong Kong.
The corporation will review whether there are ex-Bank Century assets stored in Swiss institutions. If there is, the corporation will immediately request the Ministry of Law and Human Rights to do asset tracking or asset seizure and repatriation using MLA.
However, it should be noted that this collaboration does not include extradition and corporal punishment against criminal offenders. It means, if it is known that there are Indonesian corruptors who embezzle their wealth in Switzerland, the Indonesian government is still subject to Swiss criminal law, and does not necessarily carry out a trial.
So more, there are some notes that need to be explored together, which are related to what kind of cases the government will target in relation to this agreement. If there is no case of progress and is being handled, it is likely that the case as well as the agreement will only become a mere document, even as an self image.
It means that if there is indeed a case shot in Switzerland, the government is asked to seriously investigate thoroughly and dismantle the Indonesian financial mafia network, straightforwardly, either close people or anyone who involved.
On the other side, the government need to renew the latest progress on the practice of money laundering doing by perpetrators of Indonesian economic crimes that may no longer make Switzerland a place to store assets, accounts or money, but instead have switched to other countries.
For example, in 2016 the case of the Panama Papers was stirred up by dragging many Indonesian businessmen, politicians and elites who embezzled their wealth in the tax heaven country, Panama.
Because, within a few months until the ratification of Indonesian Parliament in October 2019, the door opened for corruptors to move their assets to another place and the government instead ran out of ammunition to hunt down the corruptor.
Written by Daniel Deha, Email: email@example.com