Three oil companies quit Batam

Three oil companies PT Unocal, PT Sea Gata and a local oil company have relocated their offices from Batam island to neighboring countries following the government's decision to impose a 10 percent valued added tax beginning this month.

PT Unocal had moved its office to Singapore, Sea Gate to Thailand while the local company to Dumai, another town in Riau province, Asman Abnur, the chairman of the local office of the Indonesian Chamber of Commerce and Industry, told Antara on Saturday.

He said that the three companies the introduction of the 10 percent valued added tax would make production costs on the industrial bonded island much higher than companies in other parts of the countries.

Batam, part of Riau province, is one of the country's largest industrial bonded area. Previously, the government exempt companies operating in the province from valued added tax payment to encourage investments.

"With the new tax, it will be difficult for Batam to compete with industrial estates in other ASEAN countries such as Vietnam and China," he said. (*)