Secretary General of the Ministry of Finance (MoF), Hadiyanto, delivering the statement of the Government in the judicial review hearing of the Law on Access to Financial Information on Monday (5/2) in the Courtroom of the Constitutional Court. Photo by Humas MK/Ifa.

Law No. 9/2017 on Access to Financial Information creates justice in the tax collection system so that all taxpayers can contribute through the tax payment for the development of the Republic of Indonesia. This was conveyed by the Secretary General of the Ministry of Finance (MoF), Hadiyanto, in the material judicial hearing of the Law on Access to Financial Information held by the Constitutional Court (MK) on Monday (5/2).

Hadiyanto who represented the Government, said tax collection efforts face obstacle with the rampant tax avoidance and tax evasion by taxpayers, which are done by exploiting the limitations of access to financial information for the benefit of taxation. Those limitations, Hadiyanto continued, are used by taxpayers to misreport their income and property, assuming that the concealment of financial information will never be known by the DGT. In other words, the limitations of access to financial data or information will greatly affect the DGT\'s ability to ensure taxpayers’ compliance in fulfilling their tax obligations.

"Based on the description that has been submitted with the consideration of the urgent need to immediately provide access for tax authorities to receive and obtain information for tax purposes, the President established a regulatory government regulation, Perppu No. 1/2017 on Access to Financial Information for Tax Purposes on May 8, 2017," he said before the Panel of Justices led by the Chief Justice, Arief Hidayat.

Hadiyanto also explained that the Law on Access to Financial Information also serves to encourage the improvement of taxation database from financial institutions and partner countries or the jurisdiction of AEOI partners. Furthermore, Hadiyanto supports efforts to collect tax revenue so that the tax ratio increases.

"Fulfilling Indonesia\'s commitment to AEOI in 2018, so that Indonesia will not be reported as failing to meet their commitment and non-cooperative jurisdiction, and to maintain the sustainability of the effectiveness of the tax amnesty program as mandated by Law No. 11/2016 on Tax Amnesty. With Law No. 9/2017, the DGT can obtain financial data or information of taxpayers, both in and out of the country," he said.

Related to the petition, Hadiyanto opined that the Petitioner had mistakenly understood and interpreted the provision of Article 8 of the Appendix of the Law on Access to Financial Information. The provision petitioned by the Petitioner is limited only to tax purposes, not other purposes, so that for purposes other than tax, the provision on the confidentiality of financial information is still valid. He explained that the provision of Article 2 of the Appendix of the Law on Access to Financial Information clearly limits the authority of the DGT, that is, it is only able to access financial information for tax purposes from financial services institutions in banking, capital market, insurance, as well as other financial services and/or entities categorized as financial institutions in accordance with the standards of financial information exchange based on international agreements in taxation. "Access to financial information provided to the DGT does not mean that the DGT can directly access financial information systems owned by financial institutions. Access to financial information is provided in the form of delivery of financial data and information owned by customers by financial institutions to the Directorate General of Taxes," he said.

Case Number 102/PUU-XV/2017 was petitioned by a lecturer of law at the University of Indonesia, E. Fernando. M. Manullang. He has a savings account at a bank. With the enactment of Law No. 9/2017, the potential losses that can be ascertained are banks and/or other financial institutions may intentionally or unintentionally and/or directly and/or indirectly disclaim any responsibility for guarding the privacy of every Indonesian citizen (WNI). It is done under the pretext of implementing the provisions of the law, which are substantially inconsistent with the Automatic Exchange of Financial Information (AEOI). (ARS/LA/Yuniar Widiastuti)