Hardiono calls for amendments of tax regulations
Thursday, June 28 2012 - 03:32 AM WIB
Upstream authority BPMIGAS Vice Chairman Hardiono said that there were still a number of tax regulations concerning the oil and gas upstream sector that needed to be amended to improve legal certainty and attract more investments to the country.
Addressing the Indonesian oil and gas taxation conference held by Petromindo.com and OGE Asia magazine in Jakarta on Wednesday, Hardiono noted that the difference of stances between the finance ministry?s directorate general of state budget (DJA) and directorate general of taxes (DJP) on the tax on parent company overhead cost, technical services assistance, and value added tax, had caused the legal uncertainty.
He pointed out that the directorate general of taxes still imposed the taxes on the upstream contractors although the ministry of finance had stated that those taxes should not be borne by the contractors.
?Until now the DJP has published the SKPKB for several upstream contractors amounting to Rp 230 billion. The contractors still wait for a solution for the mechanism regarding the DTP (borne by government),? he added.
He called for the amendments on tax treaty for exemption of PBDR (tax on interests, dividend, and royalty) of income from the PSC contractors, and also amendments of PSC, with inserting clause of percentage stability of split share, to maintain changes in the government take.
He also said that the tax imposed on equipment leased by the contractors for their oil and gas activities should not be based on the equipment value but on the basis of their leasing fees.
Editing by David Mustakim