BI against easing of banking secrecy<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Bank Indonesia joined on Thursday a chorus of objections in
\nresponse to a proposal to relax the banking secrecy code, saying
\nit would shatter confidence in the banking sector and even
\nprovoke capital outflows.<\/p>\n
"People might lose confidence in banks and then stash their
\nfunds abroad," Bank Indonesia senior deputy governor Anwar
\nNasution told reporters.<\/p>\n
Anwar added that the banking secrecy had recently been relaxed
\nto help the investigation on money laundering, terrorist funds
\nand corruption. "Whatever the Ministry of Finance asks in that
\nregard, we'll follow."<\/p>\n
But, he doubted that applying a similar treatment for tax
\ncollection purposes was the best possible solution, as the
\ncountry still needed to retain confidence in the banking sector.<\/p>\n
The House of Representatives budget commission earlier this
\nweek recommended that the government relax the banking secrecy
\ncode to help increase tax revenues. Under this proposal, the tax
\noffice would have access to taxpayers' bank accounts.<\/p>\n
Several lawmakers said some taxpayers might have reported less
\nthan their actual wealth to avoid paying taxes. Relaxing the
\nbanking secrecy code and allowing access to individuals' bank
\naccounts would thus increase tax revenues, so that the current
\nfailure to meet the tax revenue target would not recur.<\/p>\n
Tax revenues are expected to total Rp 248.5 trillion this
\nyear, falling short of the initial target of Rp 254.1 trillion,
\nwith the non-oil and gas income tax target falling from Rp 106.1
\ntrillion to Rp 104.3 trillion.<\/p>\n
However, the recommendation has so far met with objections
\nfrom various parties, including Minister of Finance Boediono and
\nthe ministry's Director General for Taxation Hadi Purnomo, for
\nfear that it would ruin the hard-won public confidence in the
\nbanking sector, which has yet to fully recover from its lows
\nfollowing the banking crisis in the late 1990s.<\/p>\n
Anwar said relaxing the banking secrecy code would also
\nrequire an amendment to the country's Banking Law.<\/p>\n
Under the existing law, the bank is protected by secrecy
\ncode, which, could only be opened by other parties in
\nextraordinary conditions, such as those related to corruption,
\nmoney laundering or terrorist activities.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bi-against-easing-of-banking-secrecy-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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