FSA summoned three Singaporean banks

JAKARTA. Singaporean banking’s move to prevent Indonesian taxpayers to participate in tax amnesty by reporting their assets to local authority has triggered harsh reactions from Indonesian public.

Amid the reactions, Financial Service Authority or FSA (OJK) on Wednesday (21/9) summoned three Singapore-based banks, namely OCBC NISP, UOB Indonesia, and DBS Indonesia. However, FSA did not invite Danamon to join the hearing session. At the hearing, FSA asked for clarification from the banks about their parents’ stand point over tax amnesty program.

Deputy Commissioned of Banking Supervision at FSA Irwan Lubis said that FSA has strongly urged those Singapore-based banks to support tax amnesty program.

Irwan said that those three banks claimed to have socialized the program to their parents in Singapore. Subsequently, the parent banks have followed up the information by advising their Indonesian customers to support the program.

According to FSA, any attempt by Singaporean banks to obstruct tax amnesty program will bring negative impact to the relation between financial authorities of the two countries.

The four Singapore-based banks (OBCB, DBS, UOB, and Danamon Bank) control a worth of US$35 billion in Indonesia, while 5%  of their customers are Indonesians.

Support tax amnesty

Irwan said, the three banks explained FSA that they have to report the assets of Indonesian clients embracing tax amnesty in order to comply with Financial Action Task Force or FATF’s regulation. FATF itself is an institution that monitors money laundering activities in Singapore.

However, Irwan explained that Singapore’s Commercial Affairs Department (CAD) did not follow up the report. Irwan added that Money Authority of Singapore (MAS) through press release has also confirmed this matter.

Head of Group Strategic Marketing and Communication at DBS Indonesia Mona Monika confirmed the summon. Furthermore, Mona ensured that both DBS in Singapore and Indonesia support the tax amnesty program.

Mona claimed that DBS does not dispute the intention of their clients to participate in tax amnesty.

According to FSA’s record, UOB and DBS, which have been appointed as gateway for funds repatriation, each has absorbed at least IDR500 billion of redemption fees.

As of September 2016, tax authority just collected IDR2.5 trillion of repatriated funds and IDR22.6 trillion of redemption fees. (Translator: Muhammad Farid)