Government Considers Forming Cross-Sectoral Team on Panama Papers

The government is considering forming a cross-sectoral team to study the contents of the Panama Papers. The team will enable the government to investigate and collect tax owed by the 899 Indonesian citizens named in the document.

Director of Counselling, Services and Public Relations of the Directorate General of Tax Mekar Satria Utama said that the involvement of stakeholders from various levels is needed to deal with the Panama Papers. That way, the document can be used as the basis for investigating the assets of Indonesian citizens held abroad, especially in tax havens. The tax agency is able to collect tax from the taxpayers if it is proved they have hidden their wealth.

That is why the government is currently discussing the formation of a cross-sectoral team or agency to investigate the Panama Papers. “We have discussed this but we have not decided whether to form an agency or not. But, for sure, it must handle in a multilevel way,” said Mekar to Katadata, Thursday (21/4)

(Read: Government Offers Names in Panama Papers to Participate in Repatriation)

Even if the government does not form a team or an agency, he expects to see a cross-sectoral cooperation among the ministries and state institutions for verifying and validating the data in the Panama Papers. The Financial Transaction Reports and Analysis Centre (PPATK) can investigate the cases, and the police can ascertain whether a crime has been committed. Bank Indonesia can assist with monitoring foreign exchange traffic and the Financial Services Authority (OJK) can access bank data. “This will result in much better information,” he said.

Earlier, the executive director of the Centre for Indonesia Taxation Analysis (CITA) Yustinus Prastowo said that the government will be able to use these papers to collect taxes owed. The implementation of tax amnesty will be much more effective if it is supported by the automatic exchange of information (AEOL) because taxpayers must comply with the rules.

(Read: Palace Discusses Panama Papers with Law Enforcement Agencies)

As reported earlier, the International Consortium of Investigative Journalists (ICIJ) simultaneously published a document called the Panama Papers early April. This is leaked data from Mossack Fonseca comprising 11.5 million documents containing a list of Fonseca's clients from various countries, including Indonesia, who have allegedly used tax havens to hide their wealth from the tax authorities. As many as 899 Indonesian citizens allegedly own shell companies in various tax havens.

One of the people named in the Panama Papers is Harry Azhar Azis, the Supreme Audit Agency (BPK) chief, who admitted to owning a shell company, Sheng Yue International Limited, in the British Virgin Islands. Unfortunately, he failed to disclose this in his wealth disclosure form (LHKPN), even when he was appointed as BPK chief in October 2014.

(Read: Named in Panama Papers, BPK Chief: My Child Asks Me to Establish Company)

The presidential chief of staff Teten Masduki chaired a meeting in the palace on the Panama Papers. The meeting was attended by police chief General Badrodin Haiti, chair of the Corruption Eradication Commission (KPK) Agus Rahardjo, director general of tax Ken Dwijugiasteadi, PPATK chief Muhammad Yusuf, and representatives from the finance ministry and BI.

The government expects to repatriate the money held by Indonesian citizens abroad. According to the official KSP website, “The repatriated money can be used by the government to accelerate development, especially infrastructure, and to improve the people’s welfare.”