IPPs asks Supreme Court to settle VAT dispute<\/p>\n
Moch. N. Kurniawan, The Jakarta Post, Jakarta<\/p>\n
Independent geothermal power producers (IPPs) in the country are
\nputting their last hopes on the Supreme Court to independently
\nsettle their dispute with the tax office over a controversial
\nvalue added tax (VAT) ruling.<\/p>\n
Riki F. Ibrahim of the Indonesian Geothermal Association (API)
\nsaid that the IPPs could not expect a fair decision from the tax
\ncourt as many of the judges came from the Directorate General of
\nTaxes.<\/p>\n
"We think many judges in the tax court are not neutral as they
\ncame from the Directorate General of Taxes. How will the decision
\nbe fair?" he told The Jakarta Post.<\/p>\n
"We expect the Supreme Court, as the highest court, will be
\nable to decide our cases independently."<\/p>\n
The Directorate General of Taxes ordered nine geothermal IPPs
\nand 33 oil and gas firms at the exploration stage to pay a 10
\npercent VAT starting 2000, a move seen by the companies as
\nagainst an existing contract signed with the government.<\/p>\n
Under the contract, geothermal IPPs or oil and gas firms under
\nthe exploration phase are allowed to delay the VAT payment until
\nthey reach the commercial production stage. They said that this
\nwas a facility introduced by the government in 1989 as an
\nincentive to investors in the particular sectors.<\/p>\n
The protesting IPPs and oil firms then filed a complaint with
\nthe tax court, previously known as BPSP or the tax settlement
\ndispute body.<\/p>\n
The tax court, however, has so far issued six mixed rulings:
\nFour in favor of oil and gas companies Mobil Exploration
\nIndonesia, BP Indonesia, TotalFina Elf and an IPP Unocal
\nIndonesia, and two in favor of the Directorate General of Taxes
\nagainst Kufpec Indonesia Ltd. and Amoseas Indonesia.<\/p>\n
Riki said that Amoseas, a wholly owned IPP of American firm
\nChevron Texaco, is planning to file an appeal at the Supreme
\nCourt.<\/p>\n
He added that other IPPs would make a similar move if the
\noutcome of the court ruling went against them.<\/p>\n
"At present, Amoseas Indonesia, who lost its legal battle at
\nthe tax court last week, has confirmed an appeal to the Supreme
\nCourt," he said.<\/p>\n
According to a source close to the legal battle, Amoseas had
\nalready paid some Rp 76.4 billion (US$8.2 million) in VAT.<\/p>\n
The companies are required to pay the VAT first before going
\nto the tax court.<\/p>\n
The Directorate General of Taxes has taken the controversial
\nmeasures in a bid to meet tax revenue targets in the state
\nbudget. It could raise some Rp 2 trillion in additional VAT from
\nthese companies.<\/p>\n
The IPPs criticized the new policy, saying it would only
\nhamper investment in the country.<\/p>\n
Officials of state-owned oil and gas firm Pertamina said the
\nprotesting IPPs may bring the case to international arbitration,
\nwhich in many cases have inflicted multi-million dollar losses on
\nthe government.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ipps-asks-supreme-court-to-settle-vat-dispute-1447893297",
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