Govt plans tax incentives for geothermal investors

The government will give tax incentives to investors not only to bear the risk in upstream operations, but to support the development and usage of geothermal power, the Investor Indonesia daily newspaper reported in its Tuesday edition.

Directorate general of mineral resources and geology secretary R. Sukhyar said on Monday in Jakarta that the government is currently considering tax incentives to geothermal investors.

“We will try to utilize the provision (regarding tax facilities) mentioned in the geothermal law,” Sukhyar said.

The new tax facilities will remove the old tax regime, 34 percent tax on investor’s net operating income. Under the Law No. 27/200 on geothermal steam, according to Sukhyar, the government can give tax benefits to geothermal power investors.

“So, later the tax will be in the form of corporate or value added tax or other name. But it will make sure that the tax will not exceed 34 percent,” Sukhyar said.

He also said that the investors will not be imposed any other burden other than the tax. The central government and the local administration will share the income from selling the steam to the investor with a ratio of 80:20. (*)