Tax system in oil and gas sector should be reviewed: Purnomo

Minister of Energy and Mineral Resources Purnomo Yusgiantoro has asked the tax authority to review the tax system adopted in the country’s oil and gas sector in a bid to improve the business climate in the oil and gas sector, Kompas reported Wednesday.

Speaking to reporters following a meeting with the Indonesian ambassador to Russia, Susanto Pudjomartono, Minister Purnomo said that the obligation imposed on oil and gas investors to pay tax during exploration activities had discouraged investors from entering the country’s oil and gas sector

During the meeting, Ambassador Susanto briefed Minister Purnomo on the latest tax policy adopted by Russia. Susanto said that Russia has lowered the tax rates imposed on oil and gas companies in a bid to attract more investors to enter the country’s oil and sector.

Purnomo said that the Indonesian tax authority should introduce a similar tax policy because the planned increase in the portion of investors in the existing profit sharing contract would not bring significant impact in improving the business climate in the oil and gas sector. (*)