The Taxman Cometh – With the Help of Spooks
Jakarta. Indonesia’s spy agency will conduct wiretaps of suspected tax cheats from next year, as part of the government’s wider efforts to boost revenue collection.
The Finance Ministry’s tax and excise offices are expected to bring in a combined Rp 1,546 trillion ($113 billion) in revenue next year, but economists have panned the target as unrealistic amid a slowing economy.
To ramp up collections, the tax office recently attempted to gain access to the bank accounts of suspected tax evaders, but faced stern opposition from banks and legislators, citing the 2009 Banking Law that protects depositors’ privacy.
However, the State Intelligence Agency, or BIN, says it can skirt that provision by enforcing its own legal powers to collect financial information and conduct a wiretap on anyone in the interest of national security, “which includes the economy and state finances,” said BIN chief Sutiyoso on Thursday.
To that end, the BIN and the Finance Ministry have agreed to set up a joint task force that will be responsible for early detection of tax fraud, improving the competency of the tax intelligence unit, expanding the tax base and boosting information sharing between the two institutions.
Finance Minister Bambang Brodjonegoro said he welcomed the cooperation with the BIN, whose agents will probe corporate and individual taxpayers’ financial data and investigate suspected cases of tax evasion.
“The target is mainly on shady business or [tax-evasion] patterns that have not yet been detected,” Bambang said.
He added the tax office had long suspected that many taxpayers were not declaring income from other businesses outside of their primary activities.
Unpaid taxes in Indonesia potentially amount to up to 19 percent of the country’s $850 billion GDP, according to University of Indonesia tax expert Darussalam.
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