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Indonesia seals deal with Australia to exchange tax information

Jakarta Post - September 11, 2020

Adrian Wail Akhlas, Jakarta – Indonesia's tax office and its Australian counterpart have joined hands to exchange information as part of the latest efforts to fight tax avoidance, the Taxation Directorate General announced on Wednesday.

The tax office and the Australian Taxation Office (ATO) signed a memorandum of understanding (MoU) last month to exchange tax information automatically starting on Aug. 19 under the double tax treaty.

"The Taxation Directorate General will receive information related to income received by Indonesian taxpayers from Australian tax subjects," the tax office said in a statement. The information will be used to implement compliance risk management and law enforcement and ensure compliance of Indonesian taxpayers.

The tax office said the information exchange would help fight tax avoidance committed by taxpayers by underreporting their income and assets abroad. "The collaboration between the tax office and the ATO through the taxation information exchange is in line with a global commitment to create transparent taxation," it added.

The government has collected Rp 601.9 trillion (US$40.98 billion) in tax income as of July this year, down 14.7 percent year-on-year due to the coronavirus pandemic. That is around 50 percent of the full-year target.

Tax income this year may fail to meet even the most-recently revised target, as economic activity had slowed more than expected, Finance Minister Sri Mulyani Indrawati said on Wednesday.

The government expects a greater tax shortfall this year following a change in the government's economic growth estimate. Tax income would be slightly below the target set in Presidential Regulation (Perpres) No. 72/2020, she added.

The government previously expected tax income to reach Rp 1.19 quadrillion this year, around 10 percent lower than stated in the initial 2020 state budget plan, as the coronavirus pandemic has hit economic activity hard.

Source: https://www.thejakartapost.com/news/2020/09/11/indonesia-seals-deal-with-australia-to-exchange-tax-information.html