Confidentiality<\/p>\n
Article 40, paragraph (1) of the Basic Law of Banking No
\n7\/1992 stipulates that banks are prohibited to reveal information
\nconcerning the financial position and other matters of their
\nclients, a common practice in banking world.<\/p>\n
The officials of the Directorate General of Tax can only audit
\nthe bank's books upon a written order from the Finance Minister,
\naccording to Article 41 paragraph (1) and Article 42 paragraph
\n(1) of Law No. 7\/1992.<\/p>\n
Recently Director General of Tax Fuad Bawazier issued a
\nconfidential circulation to his subordinates to the effect that
\nthe Directorate General of Tax can audit the banks as tax payers.
\nThe circulation was issued in March 1995. Banks are regarded as
\nordinary tax payers.<\/p>\n
In my opinion, the Director General's circulation violates and
\nis contradictory to Law No. 7, 1992 concerning banking
\nprinciples. The banks must have the guts to refuse the auditing
\nunless the tax officials have a written order from the Finance
\nMinister. It is obvious that bank clients must be protected or
\nthe bank will lose the confidence of its patrons, which could
\nresult in the clients deserting the bank.<\/p>\n
However, if there is a strong indication that the bank has
\nmanipulated its books, then the Director General of Tax should
\nget written permission from the Finance Minister to audit the
\nbank's performance. And before issuing the permit, it is
\nadvisable that the Minister ask for approval from the Central
\nBank.<\/p>\n
Based on Law No. 7\/1992, Articles 40, 41, and 42, banks are
\ndescribed as lex specialis, (having privileges and be protected).<\/p>\n
SUHARSONO HADIKUSUMO,<\/p>\n
Jakarta<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/confidentiality-1447899208", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }