Govt to nullify decision to revoke tax incentives

JAKARTA (JP): The government has decided to reinstate tax incentives given to companies undertaking debt restructuring following criticism from the business community.

Director General of Taxes Machfud Sidik said that the government's earlier decision to revoke the tax incentive had been voided.

Therefore companies undertaking debt restructuring through the Indonesian Restructuring Agency (IBRA), the Jakarta Initiative Task Force (JITF) and the Indonesian Debt Restructuring agency (INDRA) again are allowed to defer payments of value-added tax on asset sales.

Normally, the transfer of assets from one organization to another is subject to 10 percent valued added tax.

"For example the assets taken over by IBRA as collateral ... the debtor doesn't have to pay the 10 percent value-added tax before a sale is made," he said.

Several businessmen, including chief operating officer of JITF, Samuel Tobing, and chairman of the Indonesian Chamber of Commerce and Industry (KADIN), Aburizal Bakrie, had expressed their surprise and concern over the government's decision to revoke the incentive.

They said that without tax incentives the restructuring of indebted companies would be even slower, which would undermine the banking sector. (tnt)