Indonesia and Japan Discuss Steps Toward Adopting AEOI

Jakarta (Antara Bali) - The Taxation Directorate General (DJP) of the Finance Ministry  and Japan's National Tax Agency (NTA) discussed steps toward implementation of the Automatic Exchange of Information (AEOI) in 2018.

With AEOI, all bank accounts in the world would be accessible to investigation of taxable assets  in the international attempt to eradicate tax evasion.  
     
DJP and NTA expressed commitment to adopting the AEOI at a meeting in Tokyo between Director of International Taxation of the DJP John Hutagaol  and Deputy Commissioner of NTA Takeshi Kurihara, the DJP said in a news release received here on Thursday.

The meeting discussed taxation issues such as the readiness of the two countries to adopt the AEOI  and standard of anti tax evasion,Base Erosion and Profit Shifting (BEPS).

NTA expressed appreciation to the Indonesian taxation directorate general for its quick response to a request for exchange of information from NTA.

Apart from the AEOI and BEPS issues, DJP and  NTA also discussed the effectiveness of technical assistance provided by NTA in the capacity building of the employees of the DJP.

NTA  said it offers assistance for employees' capacity building to be more effective in carrying out their duty especially  with the growing international transactions  and more complicated "tax planning".

The two sides exchanged Memorandum of Cooperation to show strong commitment to cooperation in facing international tax evasions.

After the meeting with NTA, the DJP delegation held a meeting with Japanese business community.  
Earlier this week, Finance Minister Sri Mulyani Indrawati said by May, 2017 the government would finish drafting regulations to back up implementation of AEOI in 2018.

All law regulations on access to information have to be ready by May, this year, the Minister said.

"This means there would be no more banking secrecy in Indonesia," Sri Mulyani said here on Wednesday.

The minister said the era of openness of bank data for the sake of transparency in taxation will soon be in place  and Indonesia has been committed to taking part in data exchange among nations in 2018.

Currently data exchange is still blocked by  the Banking Law, Sharia Banking Law, Capital Market Law or Insurance Law, which have confidential elements  that could not be penetrated automatically.

"In order to meet the AEOI requirements, Indonesia must have primary level law regulations that is law regulations giving tax institution access to information about tax payers," Sri Mulyani said.

She said at least 50 percent of 102 countries, which have  commitment to data exchange, already have law regulations providing access to banking information  and to implement AEOI by 2017.

The government also would provide strong and standard data base information system  that the confidentiality of the exchange of data  is secured and the  management is in line with the AEOI commitments.

The Minister said getting ready internally is important before Indonesia engaged itself in banking data exchange  with other countries, especially as now not all tax payers have properly reported their assets.

The government has pledged to take firm action against tax evasion after its tax amnesty program , which obviously would not fully meet the government targets or expectation.

The tax amnesty program which started in July, 2016 would last only until the end of this month.

Tax penalty , asset declaration  and repatriation of assets from abroad all still fall far short of the targets , although  Indonesia is said to be the most successful so far among countries in the world having implemented tax amnesty. (WDY)