Govt promises 10-year tax holiday for refinery project

The government has agreed to provide tax holiday for ten years to help lure private investment to develop domestic oil refineries, said Finance Minister Bambang Brodjonegoro.

?For now, we?re offering 10 years (tax holiday). But if later the demand is mostly for more than 10 years, we?ll review it,? he said on Thursday.

Kuwait Petroleum and Saudi Aramco have backed down from their previous plans to develop refineries in Indonesia as their request for a tax holiday of up to 20 years have been rejected by the previous administration.

Bambang said that the two investors can now re-submit new plans to the government, which is struggling to develop domestic refineries in a bid to help reduce fuel import which has undermined the country?s current account deficit.

Minister of Energy and Mineral Resources Sudirman Said said that the government has allocated about 500 hectares of land in Bontang, East Kalimantan, for the development of a 300,000 bpd oil refinery. Tender process for the project is now being prepared, in the hope that it could be implemented in the first semester of 2015, he added.

Sudirman said that if investors are looking for other locations, the government would also facilitate it. (*)