Susilo pledges to remove investment barriers
Monday, December 13 2004 - 03:24 AM WIB
Understanding that the main obstacle to investment in the sectors is the government?s unfavorable policies, Susilo pledged to ?offer a more open, relaxed policy that is much more friendly to investors?.
?I wish to reassure you that will do my best to remove major barriers in this important sectors,? Susilo said in his speech at the Bimasena International Energy and Mineral Conference 2004? in Jakarta.
Among the main issues addressed by the President in his speech is the tax policy that many investors in the sectors have often complained about.
Oil and gas investors, for instance, are concerned with the government?s new policy on import duty and value added tax (VAT). In the past, they were allowed to pay import duties and VAT after they began commercial production. Now, they are required to pay the taxes in advance when they start their works. Under the existing regulation, the government has to refund the import tax and VAT payment within certain period of time, but in reality, oil and gas investors say it is not easy to obtain the tax refund, while they anxiously need the money to finance their investment activities.
?I have asked to review and study exiting tax policies to find more sound and proper policies,? Susilo said.
Susilo, which took over from former President Megawati Soekarnoputri in October this year after a landslide victory, also said that he had been seeking to solve legal uncertainties beleaguering the sectors by among others urging governors to develop more sound and better policies. Investors often complain about policies issued by regional administrations, which are in conflict with their contracts, and the central government?s policies.
The President, who, during campaigns, pledged to stamp out corruption and revive investment, also said he had asked his Cabinet members to harmonize regulations issued by various ministries to avoid contradictions and overlaps.
When asked by Petromindo for comments, businessmen attending the conference generally welcome Susilo?s speech, while expressing hopes that he would keep his promises.
Separately, Iin Arifin Takhyan, director general of oil and gas at the Ministry of Energy and Mineral Resources, confirmed to Petromindo on Monday that the reviewing process of the VAT and import duty policies were now in progress.
?The Coordinating Minister of the Economy (Aburizal Bakrie) has ordered the review. There have been talks between the directorate generals of taxation and customs and excise to follow up the order,? Iin said. (Alex)