SKK Migas opposes PBB tax on oil, gas exploration

Upstream authority SKK Migas warned that oil and gas exploration activities in the country may eventually stop due to government regulation requiring oil and gas companies to pay so-called land and building tax (or PBB) during exploration stage.

Kontan quoted SKK Migas Spokesman Zuldadi Rafdi as saying Thursday that this would cause the country to have difficulties in finding new oil and gas reserves as contractors would be reluctant in carrying out exploration programs due to the burdensome tax.

The Directorate General of Taxation rejected earlier this month the request of oil and gas contractors to be exempted from the burden some PBB tax during exploration stage.

Zuldadi said that SKK Migas has submitted a recommendation to the Ministry of Energy and Mineral Resources to propose a revision into the policy by at least exempting companies which have already carried out exploration work from the PBB tax. (*)