Govt to nullify decision to revoke tax incentives

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)