Govt exempts oil, gas equipment from VAT and import tax
Thursday, April 25 2013 - 10:08 AM WIB
The government?s decision is contained in the finance ministry's regulation 70/PMK.011/2013 dated April 2nd, 2013.
The ministerial regulation is in line with the presidential decree (Inpres) No. 2/2012 on increasing national oil and gas production, which requires that all concerned heads of ministries and local administrations to support the efforts of increasing the national oil and gas production.
?SKK Migas highly appreciates Minister of Finance for the decision to exempt the oil and gas activities from import tax and VAT. We hope this new decision will help revive the interests of investors to explore and produce more oil and gas,? Bambang Yuwono, head of risks and taxes management division with the upstream authority SKK Migas said in Jakarta on Thursday, 25th April 2013.
He noted that with the inclusion of vice minister of finance to the supervisory commission of SKK Migas, the ministry has got deeper understanding of the oil and gas industry, which is capital intensive and highly risky.
Throughout this year, SKK Migas has targeted to conduct drilling on 258 exploration wells, 1,178 development wells, and 1,094 work-over wells. Besides that, there are also plans to conduct 2D seismic surveys along 18,751 kilometers and 3D seismic surveys across 22,298 squared kilometers.
Since early this year, Indonesia?s production of oil and gas has increased. In March, the average production of oil was at 840,000 barrels per day, while during the whole first quarter this year, it averaged at 830,900 barrels per day. If compared with production in December 2012, which stood at 825,000 barrels per day, then SKK Migas has managed to arrest the declining trend down to zero percent and there has even been a tendency of rise.
?This is not the success of SKK Migas alone. But it is the success of all stakeholders in the oil and gas industry,? he added.
Editing by Benget Besalicto Tnb.