Customer Data Opening Can Trigger Capital Flight

JAKARTA.  Directorate General of Tax intention to freely access financial institution customer data can be problematic.

Fuad Rahmany, Director General of Tax, said, the taxation service's power to access bank customer data is a common practice all over the world. “It has been applied in many other countries. Open bank secrecy for tax purposes, it does not matter, really, " said Fuad, Monday ( 17/3 ).

The reason the tax office, tax revenues from the financial industry will increase rapidly, if they are able to access customer data.

Responding to demand the tax office, the Association of National Private Bank (Perbanas) explicitly rejected the plan. Perbanas reason, the opening of bank customer data would trigger capital flight, aka transfer funds to foreign banks.

"Especially to Singapore, where bank confidentiality remained strong. Customers will be wary of putting their money in Indonesian banks, " said Sigit Pramono, Chairman of Perbanas.

Sigit said , he supports efforts to increase state tax revenues by accessing customer data . But, "It should be done on a case- by-case basis. So it can’t be done for all customer accounts, " said Sigit.

Fortunately, the intention of the Directorate General of Taxation is still stalled. Authority to access the content of customer data must await revision of the Banking Act.

As reported last week, the Directorate General of Tax is lobbying by the Financial Services Authority (OJK) and the House of Representatives (DPR) to give them permit to access bank customer data.