Indonesians declare $12 billion worth of assets held in Singapore under Jakarta's tax amnesty scheme

JAKARTA - Indonesians have declared about 117.3 trillion rupiah (S$12 billion) in assets held in Singapore under Jakarta's tax-amnesty scheme.

The amount represents three-quarters of all foreign assets declared under the programme, which was pushed through by Parliament in June this year.

The share of assets declared by Indonesian citizens in Singapore was released by Indonesia's Finance Ministry on Friday (Sept 16).

The ministry said that as of Thursday, "as much as 76.14 per cent of total repatriated funds and 74.51 per cent of total declared foreign assets were from Singapore".

"This fact indicates that, contrary to some reports, Indonesians with assets in Singapore are willingly participating in the amnesty," a ministry spokesman added.

The landmark tax-amnesty plan was introduced by the Indonesian government to allow an inflow of billions of dollars into the country.

If all goes to plan, 1,000 trillion rupiah is expected to be repatriated from overseas and invested locally. It will also add 165 trillion rupiah to local tax coffers.

Under the scheme, individuals enjoy preferential tax rates ranging from 2 per cent to 10 per cent, depending on when they declare, and whether the funds are repatriated.

Some US$200 billion (S$273 billion) in Indonesian wealth is said to be stashed in Singapore.

Reuters reported on Thursday that private banks in Singapore were tipping off white-collar police with the names of clients applying for Jakarta's tax-amnesty scheme.

The Monetary Authority of Singapore (MAS) said in response to media queries that while banks in the Republic are required to file a suspicious transaction report when handling tax-amnesty cases, it does not necessarily mean that the client will be investigated by the police.

In Singapore, banks are required to adhere to the Financial Action Task Force (FATF) standard of filing a suspicious transaction report when handling tax amnesty cases, similar to the practice in other jurisdictions, the MAS says.

The news agency report also prompted Indonesian Finance Minister Sri Mulyani Indrawati and her ministry to assure taxpayers that "MAS has advised banks in Singapore to encourage their clients to use the opportunity accorded by tax-amnesty programmes to regularise their tax affairs".

"I have directly checked with the Singapore authorities, specifically Deputy Prime Minister Tharman (Shanmugaratnam) to get an official explanation from the Singaporean Government," said Dr Sri Mulyani at an impromptu press conference late on Thursday night.

A handful of wealthy tycoons - including former president Suharto's son Tommy, the Thohir brothers and the Riady family - have signed up for the amnesty. But response to the scheme, which some experts said had an overly ambitious target, has been lukewarm.

So far, 528 trillion rupiah worth of assets - at home and abroad - have been declared, with the amount being repatriated substantially lower.

For instance, of the total amount of Singapore-based assets declared, only 14.1 trillion rupiah will be repatriated by Indonesian taxpayers.

This article was first published on Sept 16, 2016.
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