Why is Singapore trying to hinder Indonesia's tax amnesty plan? That’s the question a lot of Indonesians are asking after a Reuters report state that private banks in Singapore were passing the names of clients joining the amnesty to the Singapore Police unit dealing with financial crime. This got a lot of Indonesians in Singapore worried because…well, they’re guilty.
It has been an open secret for years that there is a lot of dirty money hidden in Singapore. Indonesians hold an estimated $200 billion in private banking assets in Singapore and it has been rumored that a good percentage of this money are here in Singapore because, let’s admit this, Singapore is a tax haven. The Indonesians are avoiding taxes in their home country.
The tax amnesty from the Indonesia's Finance Ministry is supposed to be an out for these people as Indonesian President Joko Widodo want the repatriated funds to help pay for Indonesia's large budget deficit and broaden the country's tax base. So why is Singapore trying to hinder that?
Simply put; the Singapore government doesn’t want the money to fly out of the country. The Singapore economy is already in trouble, can you imagine what would happen if even half of these $200 billion go back to Indonesia?
That’s why Singapore trying to hinder the tax amnesty plan and honestly, Indonesia should have expected this. It’s $200 billion! If they think the Singapore government will just allow all the money to fly out of the country without getting their pound of flesh, they are in dreamland.