23 Banks Required to Report Credit Card Transactions to the Directorate General of Taxes, Experts Warn of Potential Risks
Jakarta — A new regulation requiring reporting of credit card transaction data to the Directorate General of Taxes (DGT) for 27 banks and credit card issuers is considered potentially risky for the banking business.
A Banking analyst and Senior Vice President of the Indonesian Banking Development Institute (LPPI), Trioksa Siahaan, said the policy is essentially aimed at improving the quality of the economic and financial data held by the DGT.
With a more comprehensive database, the DGT can conduct tax supervision and collection more effectively and can promote transparency among taxpayers in reporting their tax obligations.
However, Trioksa cautioned that the policy of disclosing credit card transaction data to tax authorities could provoke varying responses from the public, especially banking customers.
He explained that some consumers might object if all of their financial data can be accessed by the DGT, particularly if it directly affects the tax liabilities to be paid.
If some customers feel uncomfortable with the openness of this data, they could redirect their deposits or financing activities to other banks or outside banking.
“Customers may shift their placements or borrowings from the bank to alternative options. If that happens, there is potential for increased risk to the banking business,” he said.
Meanwhile, banking observer Paul Sutaryono revealed that the use of credit cards in financial transactions is currently declining as digital banking services expand.
People are now largely turning to mobile banking for everyday financial transactions.
In addition, credit card usage is being displaced by electronic wallets and digital payment services, including various pay-later services that are increasingly popular.
“One could say that nowadays credit cards are associated with older people, while Millennials and Gen Z are already familiar with smartphones as a market-friendly solution for conducting financial transactions,” he told Kompas.com on Thursday.
Moreover, he also highlighted the aspect of customer protection in the obligation to submit credit card transaction data, given that banks have an obligation to protect customer confidentiality.
In this regard, he pointed to the Financial Services Authority (OJK) to ensure the confidentiality of customer data deposited with the DGT remains protected.
“OJK must protect customers’ interests. This aligns with one of OJK’s functions, namely protecting the interests of bank customers,” he added.