From: Antara NewsJakarta (ANTARA News) - The government, under decree of the Finance Minister No 24/PMK.011/2010, is giving a fiscal incentive to upstream natural oil and gas as well as geothermal explorations.
Finance ministry spokesman Harry Z Soeratin said in Jakarta Tuesday the fiscal incentive is given under Article 3 para (2), point b, of Law No 47 of 2009 on the 2010 State Budget and to boost national oil and gas, and geothermal production.
He said the incentive takes the form of government-borne Value Added Tax (VAT) on the import of goods used in upstream natural oil and gas and geothermal explorations by upstream natural oil and gas, and geothermal companies.
Government-borne VAT will be given to goods used in upstream natural oil and gas and geothermal explorations and natural geothermal explorations under certain conditions.
He added that the conditions include goods that are not yet domestically produced, and goods already locally produced, but still lacking the necessary specifications, or goods already locally produced but in a number not yet adequate to meet the needs of the existing industries.
The upstream natural oil and gas explorations referred to in this regulation are activities aimed at collecting information on geological conditions to find estimated natural oil and gas reserves in designated areas.
In the meantime, geothermal explorations cover geological, geophysical, geochemical surveys, trial drillings, and exploration well drillings for more information on geological conditions below the surface of the earth for estimates on geothermal potentials.
Harry added that applications for government-borne VAT on imported goods used for upstream oil and gas, and geothermal explorations need to be filed to the Customs and Excise Director General along with copies on planned imports (RIB) approved by the Oil and Gas Director General of the Ministry of Energy and mineral Resources.(*)