The Singaporean government has rejected accusations made by Indonesian officials of trying to thwart Indonesia’s tax amnesty.
“Recent claims that Singapore is implementing policies to foil Indonesia's tax amnesty program are untrue," the Singapore Embassy told Indonesia in a statement reported in The Strait Times, Saturday (23/7).
The embassy's statement was reinforced by a joint official release sent to The Straits Times by Singapore's Ministry of Finance and the Monetary Authority of Singapore.
In addition, the Singaporean embassy also claimed Singapore had no interest in protecting illicit monies. "We subscribe to internationally agreed standards, including for money laundering and exchange of information," said the Singapore Embassy in its statement. In the case of any suspected cross-border tax evasion, the government concerned can approach Singapore and resolve this issue together, the embassy added in its statement.
In a Facebook post on Saturday, Singapore’s Minister of Home Affairs and Law K. Shanmugam said Singapore had enjoyed good, mutually beneficial relations with Indonesia for the last 50 years.
He did not understand the constant attempts to put Singapore down by mocking it as a small country.
“We may be small. But we are respected and successful. Our people lead meaningful lives and we don’t live in fear of anyone else," he said.
Singapore released various statements after Indonesian media published news that its neighbour was trying to block the return of funds from its banks to Indonesia by offering incentives to Indonesian clients, including tax cuts and offersof permanent residency.
(Graphic: Singapore’s Attempts to Block Tax Amnesty)
Previously, Indonesia’s Finance Minister Bambang Brodjonegoro stated he would take measures to persuade entrepreneurs to sign up for the country’s tax amnesty program in response to Singapore’s attempts to keep the funds of Indonesian citizens in its banks.
“Let them, I’m not afraid of Singapore. It’s nothing but a tiny country,” said Bambang after a meeting with the Finance Commission at the House of Representatives (DPR) complex in Jakarta on Monday last week.
The Straits Times also reported that several Indonesian officials had said Singapore was worried it may lose billions of dollars in Indonesian wealth stashed away in its banks, because of the amnesty.
DPR Chairman Ade Komarudin urged Singapore not to sabotage Indonesia’s new tax amnesty scheme, reported Bisnis Indonesia. Ade made this comment following rumours in recent weeks that some banks in Singapore had offered special incentives to Indonesian clients in a bid to retain their assets in the city state.
"I hope that is not true because it will hamper the success of the tax amnesty law," said Ade. (Read: Singaporean Banks Woo Indonesians Not to Repatriate Their Wealth)
Meanwhile, Center for Indonesia Taxation Analysis (CITA) Executive Director Yustinus Prastowo said that Indonesian businesses have told him of such approaches by "private agents" of Singaporean banks, the Jakarta Globe reported on Friday last week. Although Prastowo did not name names, his statement triggered a swift response from Indonesia’s media and politicians.
President Joko Widodo previously admitted to receiving information about these attempts by Indonesia’s neighbour. “Some offered larger benefits than the tax amnesty’s redemption fee,” he said.
Meanwhile, in a statement published in the Jakarta Globe,Vice President Jusuf Kalla said Singapore’s fears about losing funds due to the tax amnesty program proved that most of the money stored in Singapore actually is from Indonesia.