Govt to reimburse tax payment to 40 oil contractors

The government will reimburse value added tax (VAT) and sales tax on luxury goods amounting to about Rp 1 trillion to at least 40 oil and gas contractors following the issuance of Finance Minister’s decree on the practical guidelines on the tax reimbursement early this month, Kompas reported on Wednesday.

The government should return the money because the oil and gas contractors which were exempted from paying such kinds of taxes on certain sales transactions should first pay the taxes to the tax office to follow the existing procedures.

The payment was carried out by Pertamina until the issuance of the new oil and gas law in November 23, 2001 which among others removed the supervision task of the state owned oil and gas company on the country’s oil and gas exploration and production activities. The disbursement was then handled by BP Migas which is now in charge of the supervision but the payment could not be made due to the absence of formal guidelines from the Finance Minister.

“The amount of tax reimbursement is big enough because it covers all the tax payment that has been made since two years ago,” said chairman of BP Migas, Rachmat Soedibjo.

He said that BP Migas would coordinate with the tax directorate general in the reimbursement of the tax. He added that oil and gas contractors should file their application including their tax invoices to BP Migas to enable them claim their tax payment. (*)