DPR Will Pass Perppu on AEOI into Law: Former Official
Hadi Poernomo, former Director General of Tax, the Finance Ministry, believes that the House of Representatives (DPR) will pass the regulation in lieu of law (Perppu) No. 1/2017 on Automatic Exchange of Information (AEOI) into law.
“The Perppu is similar what was agreed between the DPR and the government on July 16, 2001 or 16 years ago. However, it was only an idea. But it’s basically the same,” Hadi said yesterday in a hearing with the DPR’s Commission XI at the Parliamentary Complex in Jakarta.
Hadi said that taxmen have had difficulty in detecting the exact amount and completeness of items listed by taxpayers in their tax return. He said that the issue is caused by the self-assessment method adopted in filling tax return.
Therefore, on July 17, 2007, the DPR and the government issued Law No. 28/2007 on General Provisions and Tax Procedure (KUP) which covers reporting requirement for state agencies, institutions, associations and other relevant parties.
The reporting requirement, according to the KUP law, include data and information on debtors, financial transaction, foreign exchange traffic, credit cards and financial statements. The data and information should be submitted to the Directorate General of Tax (Tax DG). However, the Tax DG cannot access the data due to the Law No. 10/1998 on Banking that regulates bank confidentiality. For tax purposes, the Tax DG can only access the data through the Finance Ministry approval.
Hadi Poernomo also believes that the Perppu on AEOI can resolve the problems currently faced by the Tax DG. He, however, warned that the access to financial information from banks and financial institutions should only be made available to the Tax DG to avoid misuse.
