Maverick Indonesia

Taxable and bankable

I’m a bit late with this posting but there was two weeks in a row when we had financial types coming to Maverick to speak at our sharing session on Fridays.

The first was on 8 June 2007 when Susanto from SIS&M Consulting shared with us his knowledge about Nomor Pokok Wajib Pajak (NPWP). NPWP is an administration number provided to individuals as an identification or identity number of tax payers to fulfill their taxation rights and obligations.

Can people be exempted? Yes, but only to those who earn below Rp13.2 million a year. That amount is the tax threshold.

Like most people I’d rather not pay tax but alas tax evasion does have its penalties. Susanto says that “there will be 20% tax penalty to your existing tax obligations if you fail to own an NPWP.” Ha! Everyone in the room was silenced.

Susanto added that in the future, every transaction will be based on tax planning. We cannot own or buy a property if our tax data shows that our income is not enough to do so. Leasing from banks will check on individuals’ who applies for a certain leasing product referring to the NPWP.

That, at least, is the theory but have you wondered why the taxman never goes after all those generals and politicians who drive around in posh cars and live in luxurious mansions that would cost them 5,000 lifetimes of their salaries?

Our second speaker was Bimo Notowidigdo, a treasurer in Citi Indonesia, who visited Maverick on 15 June 2007. Bimo is one of the lecturers in the Citi University Banking Course, so he was very familiar with his material.

A bank, said Bimo, is “a financial intermediary institution.” It’s as simple as that. From this stand point, a bank provides various services and products.

Now, what really happens to our money in the bank?

First, when we put our money into a savings account, the money actually stays in the bank only for a while. Banks immediately try to allocate that money into various kinds of investments, be it in the form of personal or corporate loans, credit cards, etc. This is why we get paid interest on our savings.

Bimo continued to share with us on financial management decisions. Most of the stuff here was “off the record” so I regret that we can’t tell you what was shared. Suffice to say that it makes for interesting listening.