PLN may get discount in income tax payment for asset revaluation

The Director General of Taxation, Machfud Sidiq, said his office would likely give discount of up to 30 percent for income tax payment by state electricity company PT PLN for incomes generated from assets revaluation.

"There will be tax facility that will benefit PLN. But it's impossible to waive PLN from paying the income tax," said Machfud, adding that PLN could benefit up to 30 percent discount for the income tax payment.

Machfud said it was impossible to waive PLN from paying taxes, because it would be unfair for the people. The taxes PLN would pay could be used to finance various government programs including to reduce poverty and create employment.

"As the director general of taxes, I say that PLN obligation must be paid. If the government wants to help PLN, it must pursue through other means, such as increasing its equity in the company or others. But the tax rules must be upheld," he said.

The government has appointed state surveyor company PT Sucofindo to conduct assets revaluation for PLN. PLN has estimated that the amount of income tax it has to pay from assets revaluation would be around Rp 10 trillion.

Minister of Energy and Mineral Resources Purnomo said earlier that the government would try to free PLN from paying the income tax from assets revaluation because of PLN's weakening financial condition due to continuing losses it booked during the past few years, including this year.

PLN has been saddled by huge debts, especially its debt to the government that is projected to soar to Rp 30 trillion in year 2001 from Rp 21 trillion as of January 2000. The government is considering a number of options to deal with PLN's soaring debt, including the transfer of the debt into equity. (*)