Cabinet to decide tax issue on imported goods for oil, gas projects

The Ministry of Energy and Mineral Resources, and the Ministry of Finance will ask the cabinet to settle their differences on whether import tax be imposed on goods used for oil and gas projects, an official told Petromindo.com Wednesday.

"We will raise the issue in a cabinet meeting and hope for an immediate settlement of our differences," said Director General of Oil and Gas Iin Arifin Takhyan.

Iin opines that the government should not impose tax on goods imported by oil and gas contractors for their mining activities.

The government has not been able to complete bidding documents for 17 new oil and gas concession areas, offered to investors last year, as the customs and excise office insists that the documents include a clause that import tax be imposed on imported goods used for oil and gas exploration and production activities.

Iin had proposed earlier that the government change the current production-sharing split if it includes import tax in the bid documents, saying that the import tax proposed by the customs and excise office will increase the burden of contractors.

The 17 oil and gas blocks, including seven offered in a special bidding system, are located in Aceh, South Sumatra, Banten, East Java, East Kalimantan, East Nusa Tenggara, Maluku and Papua.

The government had initially planned to release bid documents for the blocks last month, and it remains unclear when the documents will be made available to interested contractors. (godang)