Indonesia and Singapore will amend legal regulations to intensify tax-information exchange with a view to detecting tax evasion.

Indonesian Finance Minister Bambang Brodjonegoro (R) and his Singaporean counterpart Tharman Shanmugaratnam.

The move was clarified in an agreement freshly signed by Indonesian Finance Minister Bambang Brodjonegoro and his Singaporean counterpart Tharman Shanmugaratnam.

The agreement, upgraded from the one signed in 1992, will take effect by 2017 or 2018 at the latest. It will allow the revelation of information about individual assets, in case of need.

It aims to increase the efficiency of the fight against trans-national tax evasion and the avoidance of double taxation between the two countries.

According to Minister Bambang Brodjonegoro, Indonesia’s key weakness in the tax system is taxing individual income and assets, especially the wealthy who have assets in Singapore.

Indonesia’s new President, Joko Widodo, who succeeded in increasing tax revenue when he was the Mayor of Solo, Central Java and Governor of Jakarta, has set a target of rising the country’s tax-to-GDP ratio to 16 percent from the current 12 percent.

It looks to equalise the figure with other regional countries such as Singapore (14.5 percent), Malaysia (16.1 percent), and Thailand (16.5 percent).

Indonesia is targeting a tax revenue of about 107.1 billion USD in 2015.

(Source: VNA)