THE OBLIGATION OF BANK TO PROVIDE CUSTOMER FINANCIAL INFORMATION DUE TO TAXATION: VIOLATING OF BANK SECRECY?

Christiani, Theresia Anita and Kastowo, Chryssantus (2019) THE OBLIGATION OF BANK TO PROVIDE CUSTOMER FINANCIAL INFORMATION DUE TO TAXATION: VIOLATING OF BANK SECRECY? Bank Secrecy, Customer Data Information, Tax Purposes, 22 (3). pp. 1-9. ISSN 15440036

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Abstract

The principle of bank secrecy is one of the basic principles animating bank’s relationship with customers and becomes the bank's obligation to protect it. The enactment of Law No.9 of 2017 authorizes the Directorate General of Taxes to directly request financial information data without permission from the Financial Services Authority. The consequence of the regulation is able to harm the existence of the banker-customer relationship which becomes the basis of the relationship and the essence in bank’s operational continuity. The emergence of public distrust to banking institutions as a result of the enactment of Law No.9 of 2017 must be prevented. The emerging legal problem are whether the obligation of banks to provide information on customer data for tax purposes does not violate the principle of bank secrecy and what efforts can be taken by banks in minimizing the potential adverse impacts of the regulations. Based on these findings, this normative research using secondary data as the main data resulted that exceptions to bank secrecy are only possible if they are intended to protect much higher level of interest, namely the country’s economic interests, than the interest of customers. Requiring banks to provide customer data information for tax purposes does not violate the principle of bank secrecy although it is a form of distortion of individual rights.

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