Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) head Dwi Soetjipto turns a handle on a gas pipe at a gas network installation in Gunung Sari Ulu subdistrict, Balikpapan, East Kalimantan, while Balikpapan Mayor Rizal Effendi helps him. (Source: The Jakarta Post) Jakarta (VNA) – The Indonesian Government hasannounced several tax incentives for oil and gasindustry given the contracted exploitation in the country.
At the exploration stage, the tax office will waive outstanding value added tax(VAT) or luxury tax (PPnBM) on acquired taxable goods used in the oilexploration process. It also deducts 100 percent of outstanding land andbuilding tax (PBB) related to oil and gas projects.
The tax office will provide similar tax incentives for companies at theexploitation stage that cannot achieve a certain internal rate of return. Theeligible companies must have certain working areas, such as developments ofunconventional oil and gas fields.
The tax authority also relaxes income tax and VAT requirements on certainservices.
These various incentives are given to increase the frequency of oil and gasdiscoveries and to improve the investment climate for upstream oil and gasactivities, according to a press statement released by the tax office.
The tax incentives came after the Energy and Mineral Resources Ministryannounced a regulation that will open access for industry stakeholders to thenation’s oil and gas data, which is expected to encourage exploration andexploitation.
Indonesia has 3.15 billion barrels worth of proven oil reserves and burnedthrough 450.78 million barrels of fuel last year, ministry data show. Thegovernment expects the data regulation will help accelerate exploration to 4.36billion barrels of potential oil reserves and 39.49 trillion standard cubicfeet of potential gas reserves.-VNA
VNA
