Indosat seeks to pay tax by installment

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)