JAKARTA (TheInsiderStories) – The Indonesian Finance Ministry has re-issued regulation that allows the tax officials to collect data and information of taxpayer’s credit card transactions. This regulation once postponed two years ago following protests from the general public.
However, the government has finally granted the tax office access to financial information held by banks and other institutions, the country’s latest move to join a global framework designed to curb tax evasion.
Indonesia’s director general of taxes now possesses “the authority to access financial information for tax purposes” at financial services institutions, including banks, stock brokerages and insurance companies, a copy of the regulation shows.
These institutions are “obliged” to submit reports to the Tax Office that are in line with standards of financial information exchange based on the international agreement on taxation.
The reports should contain information such as the identities of account holders, their balance and income. The regulation also covers reporting mechanisms and timelines.
The requirements extend to anything “identified as financial accounts that must be reported” under the Automatic Exchange of Information (AEOI) framework developed by the Organization for Economic Cooperation and Development, according to the regulation. Those who fail to comply will be subject to criminal charges and face up to one year in jail or a fine of Rp1 billion (US$73,740).
The government has worked to meet regulatory requirements that will enable it to participate in AEOI. Aimed at curbing tax evasion, the framework lets tax authorities in participating countries exchange data on foreign taxpayer accounts automatically.