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Indonesia to give oil and gas sector tax breaks

Indonesia to give oil and gas sector tax breaks

Jakarta: Indonesia will lower the import tariffs for a number of equipment and products linked with oil and gas exploration from 15 percent to zero percent as of January 1, 2008, Energy Minister Purnomo Yusgiantoro said. Purnomo said that other tax breaks, including the 10 percent added value tax and 2.5 percent production sales tax, would be canceled. He said that the tax breaks would be imposed after the issuance of rules from the government. The minister said that currently the government was waiting for the list of equipment which would be exempted from import tariffs.
"We decided to free import tariff and to give taxes facilities in the sector of gas, oil and geothermal, in a bid to accelerate exploration and production," he told a press conference after meeting with Indonesian Vice president Jusuf Kalla here.
Purnomo said that the government hoped to boost revenue from the sector.
The only OPEC member country in Asia, Indonesia has seen declining oil production in recent years due to aging oil wells and inadequate investment which hindered the country to find new oil fields fast enough.
The country's aging oil wells and inadequate investment in the energy sector have led Indonesia to become a net crude oil importer, although it is still a net energy exporter thanks to a large amount of supplies of natural gas and coal.  [19/12/07]

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