Finance minister refuses to abolish exploration tax

Finance Minister Agus Martowardojo has rejected the proposal to abol?sh the oil and gas exploration taxes, which are regarded as the main obstacle in promoting investments to the upstream energy sector.

?We cannot do that as the tax abolition will only significantly affect our state income,? Agus said at the finance ministry as reported by Koran Tempo in Jakarta on Saturday.

He said that he understood that all businessmen wanted to see their obligation to the state be abolished in order to encourage more investments, but such move would certainly affect the state income.

He urged the energy and mineral resources ministry not to make up reasons in supporting its proposal to abolish the tax.

He was commenting on the proposal revealed by Energy and Mineral Resources Jero Wacik when addressing the IndoGas 2013 conference recently in Jakarta that the government is considering to provide incentives to encourage investors to do more explorations in the oil and gas sector.

During the occasion, Jero said that giving incentives will be concerned with a number of ministries. ?On our part in the energy and mineral resources ministry we?ll give incentives within our own authority. But we?ll ask other ministries to provide other incentives, including the tax of explorations from the finance ministry,? he said. (*)