PLN demands a tax privilege for asset revaluation

President of the state electricity firm PLN Kuntoro Mangkusubroto demanded a special tax break to allow it to improve its financial record through asset revaluation mechanism.

Kuntoro was quoted by Kompas daily as saying that the asset revaluation would triple PLN's assets to around Rp 190 trillion (US$1=Rp 9,100), but he added that this would not help improve the company's balance sheet if it had to pay tax for the gains resulted from the asset revaluation.

Kuntoro was responding to a statement made by Coordinating Minister for the Economy Rizal Ramli late last week suggesting PLN to revaluate assets to improve its balance sheet.

Rizal said that the government would not bailout PLN's debt because it would only create a bad precedence for other state enterprises. Rizal heads the government PLN restructuring team.

PLN has earlier asked the government to bailout around Rp 21.5 trillion in debt maturing next month by converting them into government equity in the state company. PLN said that the equity participation was needed to avoid the company to go bankrupt. (*)