Photo by Finance Ministry

JAKARTA (TheInsiderStories) – The Indonesia Finance Ministry, through the Directorate General of Tax has revealed the results of an investigation of a ‘mega-transfer’ of US$1.4 billion (Rp18.9 trillion) handled by Standard Chartered Plc, from Guernsey to Singapore in 2015.

Director General of Taxation Ken Dwijugiasteadi said the mega-transfers involved 81 Indonesian citizens, mostly entrepreneurs. He also discounted rumors about the involvement of Indonesian military personnel.

“There are no related military officials, police, or law enforcement officials: it’s purely businessmen,” he confirmed.

He revealed that, based on ongoing research, one of the reasons taxpayers perform such activity is because they want to participate in the tax amnesty program. Dwijugiasteadi pointed to 62 who already applied for the program (it ended in March of this year).

The data was obtained several months ago from the Report of Analysis Results of Indonesian Financial Transaction Reporting and Analysis Center/INTRAC, through the Minister of Finance, in order to enforce more honest compliance of taxpayers.

The Indonesian government launched a tax amnesty scheme last year to improve compliance and encourage taxpayers to bring back billions of dollars stashed abroad. Most of the offshore assets declared by taxpayers during the amnesty program were squirreled away in Singapore, historically a notorious money-laundering and tax avoidance haven (although authorities there strongly deny this).

The Monetary Authority of Singapore (MAS) and Guernsey’s Financial Services Commission were investigating that movement of assets in late 2015 – months before the Channel Island adopted a global framework for the exchange of tax data. Singapore and Indonesia said in July they were ready to automatically share financial data for tax purposes.

Standard Chartered said last year that it intended to close its trust operations in Guernsey and centralize that part of its business in Singapore. But the probe is a potential bad blow for the bank, which is trying to turn around a reputation bruised by dodgy loans and regulatory fines, claiming it is tightening compliance under a new chief executive.

MAS and Guernsey’s Financial Services Commission were looking into that movement of assets in late 2015 – months before the Channel Island adopted a global framework for the exchange of tax data. Singapore and Indonesia said in July they were ready to automatically share financial data for tax purposes.

The Indonesian government launched a tax amnesty scheme last year to improve compliance and to encourage taxpayers to bring back billions of dollars stashed abroad. Most of the offshore assets declared by taxpayers during the amnesty program had been stashed away in Singapore.

Writing by Elisa Valenta, Email: elisa.valenta@theinsiderstories.com