Interest income verification

Interest income verification

JAKARTA (JP): Tax Director General Fuad Bawazier promised yesterday that tax officials will not be allowed to track funds kept in time deposits and other forms of bank savings.

Tax officials are also not allowed to verify the accuracy of taxpayer data and the incomes gained from interest on time deposits and other bank savings, the tax director general said.

"It is in line with presidential decree No. 68 issued in 1983. The decree frees time deposits and other bank savings from being tracked and verified by tax officials," Fuad said in a statement.

Fuad said that the information was issued to clarify any confusion on the fiscal status of incomes obtained from interest on time deposits and other savings, and how they are to be computed on tax returns.

In the statement, the tax director general emphasized that the calculation for income tax on the interest from time deposits, savings and Bank Indonesia Certificates (SBIs) is still based on the government's regulation No. 51/1994. The income tax on interest, at a flat rate of 15 percent, is not included on tax returns, according to the regulation.(hen)