Govt will offer tax incentives to investors in oil and gas sector

The government will offer tax incentives to encourage investors to enter the country?s oil and gas exploration and production activities. The fiscal incentives will be available particularly for the winners of the 12 new oil blocks that will be offered in January, this year, Bisnis Indonesia reported on Friday.

"The incentives will be in the form of more attractive fiscal (tax) term. In addition the government will also clarify the status of Value Added Tax imposed on exploration activities which has been widely criticized by oil companies," Director General of Oil and Gas Arifin Takyan said in Jakarta on Thursday.

According to him, based on a study of independent consultants, the fiscal term or tax rates offered by the Indonesian to investors particularly those involved in exploration stages are still not attractive enough in luring new investors. Most of the investors came to Indonesia only due to the geological condition of the country?s oil, gas and mining activities.

Arifin said that his office would soon discuss the planned incentives with related government offices.

"Hopefully, the incentives could be applied for the exploration and production of the 12 oil blocks which will be offered to investors in January this year," he said. (*)