Singapore has formally refuted claims that it was trying to undermine Indonesia’s recently-launched tax amnesty scheme.
In a joint statement issued Saturday, the city-state’s Finance Ministry and Monetary Authority of Singapore (MAS) said: “Recent claims that Singapore is implementing policies to ‘thwart’ Indonesia’s tax amnesty programme are untrue.”
It added: “Singapore has not cut tax rates or changed any of our policies in response to Indonesia’s Tax Amnesty Programme.
“We subscribe to internationally agreed standards for combating money laundering and for exchange of information. If there is any case of suspected cross-border tax evasion, concerned authorities can approach Singapore – we have assisted and will continue to assist in line with the international standards.”
On Monday, MAS managing director Ravi Menon told an annual news conference that no major outflow of assets was expected as a result of the amnesty, and that Singapore wouldn’t be taking any action to prevent money transfers to Indonesia.
As reported, Indonesia become the latest country to introduce a tax amnesty programme last week, in an effort boost its tax coffers by inviting its HNW citizens to repatriate their undeclared overseas wealth.
Just 27 million of the country’s 250 million citizens are said to be registered taxpayers, of whom only around a million actually file tax returns.
According to press reports, the Indonesian government is projecting that as much as US$76bn could be repatriated in response to the tax amnesty scheme, which, like a number of other recently-announced tax amnesties, comes ahead of the pending introduction of the OECD’s Common Reporting Standard, a new, global system of automatic exchange of information.
Indonesia’s central bank has said it expects a rather more modest repatriation of around US$42bn, while private sector estimates put the likely figure at something closer to US$30bn.
A favourite destination
Singapore, Indonesia’s nearest major financial centre, has long been a favoured destination for Indonesian investors, although it has sought to be less hospitable in recent years to those seeking to keep their wealth secret.
According to the Straits Times, which cites as its source private bankers, as much as US$200bn in Indonesian wealth is currently estimated to be managed by financial institutions in Singapore.