Indonesia, Switzerland to Exchange Financial Data in 2019


JULY 04, 2017

Jakarta. Indonesia has signed an agreement on information sharing with Switzerland, allowing the Directorate General of Taxes to access data on foreign bank accounts owned by Indonesian citizens.

Switzerland is one of the tax haven countries, along with Singapore, Hong Kong,and Mauritius, where rich Indonesians keep their assets.

In 1999, TIME reported that former President Suharto made a $9 billion bank transfer in 1998 from a Swiss bank account to an Austrian one, which raised suspicions at home about the origins of the staggering amount of money, as presidential salary back then was only $1,764 a month. Suharto had denied ever hiding his wealth abroad.

On Tuesday (04/07), the director general of taxes, Ken Dwijugiasteadi, signed a joint agreement with Swiss Ambassador Yvonne Baumann on the information exchange to start in 2019.

"[What is] important for Indonesia is to be able to automatically exchange data with Switzerland, as the country is one of the world's biggest financial centers," a statement from the Directorate General of Taxes said.

Indonesia managed to make more than 900,000 taxpayers declare their previously unreported assets during he government's nine-month tax amnesty program. Most of the assets previously stashed abroad came from Singapore, Virgin Islands, Cayman Islands, Hong Kong and Australia.

On June 16, the tax office signed a bilateral competent authority agreement with Hong Kong's Commissioner of Inland Revenue Department to gain access to Indonesian taxpayers' data in Hong Kong.

Finance Minister Sri Mulyani Indrawati said on Tuesday the government is going to have similar agreements with other strategic countries, including the United Kingdom, the United States and Australia.

The agreements are now possible after the government issued a regulation in May, scraping bank secrecy in an effort to comply with the global Automatic Exchange of Information (AEOI) framework to prevent large-scale tax evasion.