Gateways, or institutions managing or storing repatriated funds, are obliged to periodically report their activities to the government. Director General of Financing and Risk Management at the Finance Ministry Robert Pakpahan said this provision is incorporated into signed contracts on repatriated assets.
“They must provide monthly reports,” Robert said after a seminar to promote the tax amnesty program and the development of economic policies in Indonesia in Jakarta, Tuesday (26/7). (Read: Tax Amnesty Participants Must Report Inherited Wealth).
The Finance Ministry, in collaboration with the Financial Services Authority (OJK), must have access to audit gateways from time to time. Three financial institutions have been selected as gateways for repatriated funds: which are banks, investment managers and securities.
The OJK will also partner with the Indonesian Financial Transaction Reports and Analysis Centre (PPATK) to supervise these gateways. (Read: HSBC to be Tax Amnesty Gateway Despite Rumours of the Bank Refusing to be Involved)
“The PPATK must supervise to ensure that repatriated funds are being used as they should be, which is to strengthen the nation's economic sectors,” PPATK Deputy Chief Agus Santoso told Katadata on Monday(25/7).
Agus said the PPATK is in intensive discussions with the Directorate General of Taxation and the OJK about the technical requirements of this policy. He said the government is also taking into consideration input from the gateway banks to reach a consensus on how to monitor repatriated funds stored in gateways.
Contracts involving a number of financial institutions are scheduled to be inked this Thursday. However, the Finance Minister was unable to confirm the exact number of contracts that will be signed or the names of the participants because the process is still ongoing.
Last week, four banks signed deals to become gateways. These banks were Bank Rakyat Indonesia (BRI), Bank Negara Indonesia (BNI), Bank Mandiri and Bank Central Asia (BCA). (Read: Harsh Sanctions for Cheating Banks and Tax Amnesty Participants).
Previously, Finance Minister Bambang Brodjonegoro said cheating tax amnesty participants or gateways would be liable to strict sanctions. One of the punishments is to ban the participant from the program.
If a financial institution is caught cheating, the government will review the firm's finances and its directors would have to undergo another fit and proper test.
One form of deception that concerns the government is banks offering private banking facilities to tax amnesty participants, allowing them to place their assets overseas again.