New credit card scrutiny sends Indonesians back to cash

JAKARTA (May 29): Indonesia's plan to track all credit card transactions in a bid to crack down on rampant tax evasion is pushing people back to cash, stifling government efforts to track illicit money flows.

A new government decree requiring credit card providers to submit transaction details - including customer and merchant identities - to the tax office as of May 31 appears to be spooking consumers with card activity falling in April.

The return to paper currency in the already heavily cash-based economy is a temporary setback not only for the government's drive to boost tax revenues but also its fight against money laundering, corruption and terrorism finance.

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