Indosat seeks to pay tax by installment

JAKARTA (JP): State-owned telecommunications company PT Indosat is seeking government approval to pay in installments Rp 3 trillion (about US$265.5 million) in taxes related to crossholding transactions it concluded with PT Telkom, an executive said on Monday.

Indosat's director of finance, Habimono Koesoebjono, said the taxes, due next March, were too large a sum to pay at one time as such a lump payment would severely burden the company's cash flow.

"But it won't threaten our cash flow, just make it a little bit uncomfortable for us financially," he said.

The taxes -- 30 percent of the value of the transactions -- are due on Indosat's purchase of state-owned PT Telkom's 22.5 percent share in cellular operator PT Satelindo, worth $186 million, and Telkom's 37.66 percent stake in PT Aplikanusa Lintasarta, worth $38 million.

Indosat paid $372 million in May for PT Bimagraha's 45 percent stake in Satelindo, making the company the majority owner of the cellular operator with a 75 percent stake. The remaining shares are owned by DeTe Asia Holding GmbH.

Habimono asserted that Indosat was not seeking a tax cut, but only an extended payment period.

"The amount stays the same, we just need a longer time to pay it," he said.

The transactions between Telkom and Indosat in February were part of a $1.5 billion deal to end their joint ownerships in several companies.

Besides the above deals, the transactions also involve a $945 million deal for Indosat's 35 percent share in cellular company PT Telkomsel, and a transfer to Indosat of assets from Telkom's Central Java joint cooperation scheme region run by PT Mitra Global Telekomunikasi Indonesia for $375 million. These transactions have yet to be finalized.

Earlier, Telkom's director of operations and marketing, Komarudin Sastrakoesoemah, said the company had to pay $179.7 million in taxes for its part in the transactions. (tnt)