New oil, gas contract won?t get special tax treatment

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said that new oil and gas contracts would no longer get a special tax treatment in the form of a delay in the payment of valued added tax (VAT), the Bisnis Indonesia daily reported on Thursday.

The paper quoted Purnomo as saying that such facility had only created confusion between oil and gas firms and the tax office.

?Previous contracts grant a facility for a delay in the payment of VAT particularly for PSCs (production sharing contractors) which are still under exploration (stage) and yet producing,? he said.

Purnomo was responding to the current dispute between PSCs and the directorate general of taxation over some Rp 2 trillion worth of unpaid VAT.

The PSCs insisted that according to their contracts, they are entitled to delay the tax payment. The tax office turned down this demand.

The PSCs then made an appeal to the country?s tax dispute settlement agency (BPSP).

Asked to comment on this case, Purnomo said that he would leave the matter to the finance ministry and the tax office.(*)