BPMIGAS questions changing of tax ruling for oil and gas equipment
Thursday, October 6 2011 - 12:11 AM WIB
Gde Pradnyana, head of public relation, security, and formality division, at BPMigas said that oil and gas tax imposed on imported equipments used in oil and gas exploration will no longer be borne by the government.
The change was mandated by the Law No 11, 2011 on the amendment of the Law No. 10, 2010 on 2011 State Budget.
BPMIGAS questioned the government and the parliament?s decision to scrap tax refund in the 2011 State Budget, arguing that the move could discourage investment in oil and gas explorations.
?Without exploration, there will be no discovery of new oil and gas reserves. Consequently, it will affect the oil and gas production in the future. The government?s production target will be difficult to be realized,? he said.
Over the past few years, oil and gas exploration activities have been limited, partly due to red tapes, overlapping land claim and unclear regulations.
In 2010, there were discovery of oil reserves of only 140.5 million barrels, while oil production in 2011 is estimated to reach 344.9 million barrels. Ideally, for every barrel of oil produced, it should be balanced with a finding of 1 barrel of oil to ensure 100 percent ratio.
BPMIGAS is hoping that the tax on imported oil and gas equipments used for exploration activities is borne by the government. The fiscal policy is needed to boost investment in oil and gas sector. (godang)