Oil, gas PSCs object PBB tax plan
Monday, October 28 2013 - 04:22 AM WIB
Oil and gas production sharing contactors (PSCs) including BP Indonesia, Niko Resources, ENI Spa, Total Inodnesie have urged upstream oil and gas authority SKK Migas to approach the Directorate General of Taxation to cancel the applicaton of land and building tax (better known under its Indonesian accronym of PBB) in their oil and gas blocks under exploration stage.
?BP Indonesia has objected to be imposed with millions of dollars worth of PB for its exploration blocks in the waters of Aru, Maluku,? Head of Public Relations at SKK Migas, Elan Biantoro told Petromindo.com Monday.
?Total Indonesie has objected to be imposed with PBB in Mentawati, Bengkulu, and Kepala Burung in Papua. ENI has also objected to be taxed in its exploration blocks in Sumatra and Kalimantan, while Niko Resources has been forced to park their rigs waiting for certainty over the PBB issue, especially that they will be forced to pay millions of dollars,? he added.
Elan said that SKK Migas is scheduled to meet the Directorate General of Taxation today to discuss the issue. He said that the PSCs have threathened to leave the country if SKK Migas fails to lobby the tax office to cancel the PBB application.
As reported by this portal on October 21, the Directorate General of Taxation has issued an instruction for oil and gas firms to provide details on their offshore operations, which will be used as the basis to determine tax objects in offshore upstream sector.
The instruction was stipulated in Circular Letter No. SE-46/PJ/2013. The directorate general said in the circular letter said the information regarding the offshore operation will be used as the basis for the issuance of land and building tax payable by the oil and gas firms.
Editing by Reiner Simanjuntak