Decree on PBB too burdensome for contractors: SKK Migas

By Bernard Loebs

Upstream authority SKK Migas said the ministerial regulation on land and building tax was too burdensome for oil and gas contractors.

J. Widjonarko, interim Chairman of SKK Migas, in a recent hearing with the House of Representatives VII which oversees among others energy affairs said that the Minister of Finance Regulation (PMK) No. 76/2013 stipulates land and building tax (locally known by the acronym PBB) payable by PSC holders cover the whole offshore area of their blocks.

The regulation was signed by then Minister of Finance Agus Martowardoyo on April 12,, 2013

?Offshore PSCs have to pay very huge PBB because it covers the whole area of their acreages,? he said.

According to him, SKK Migas has held discussions with PSCs over the issue.

He said SKK Migas offered solutions for PSC holders to avoid paying such a huge PBB, including that PSC holders send letters to the Directorate General of Treasury that the offshore areas have been appropriated, occupied and utilized. The director general of treasury is thus expected to issue a decree to cut PBB payable by PSC holders.

Editing by Johannes Simbolon