Geothermal investors to ask Supreme Court to annul VAT policy

Geothermal investors will request the Supreme Court to annul the government?s policy on value added tax (VAT) imposed on geothermal firms and oil and gas companies during the exploration stage, the chairman of the executive board of Geothermal Association (INAGA), Riki F. Ibrahim, said on Tuesday.

?The policy could hinder the government?s efforts to lure new investors,? Riki told reporters on the sidelines of a seminar on geothermal development.

The Ministry of Finance issued the VAT policy on Jan. 1, 2000, which replaced the previous regulation that allowed investors to postpone VAT payment until they began commercial production. The new policy aims to help raise tax revenue.

The Supreme Court has the power to nullify government regulations and policies.

Riki said earlier foreign oil and gas firms would ask state oil and gas company Pertamina to pay the VAT.

Last year, some 30 oil and gas companies filed a complaint with the board of tax settlement agency (BPSP) after Pertamina gave no response to their complaints.

Riki said the firms could take Pertamina to the international arbitration panel if it refused to pay the VAT. (Godang)