New prerequisite for petro-product dealers

New prerequisite for petro-product dealers

JAKARTA (JP): Distributors of gasoline, kerosene, diesel,
lubricating oil and liquefied petroleum gas (LPG) will have to
pay their income taxes before receiving deliveries from the state
oil company Pertamina under an agreement signed here yesterday.

Director General of Tax Fuad Bawazier said that the agreement
will boost state revenues from the taxes on oil products by up to
500 percent and will be made effective on Aug. 1 of this year.

Besides Bawazier, the agreement was also signed by Pertamina's
president, Faisal Abda'oe, and the chairman of the association of
private oil and gas companies (Hiswana Migas), Ch. Madjedi
Affandi.

According to Hiswana Migas, oil and gas distributors pay
between Rp 4 billion (US$1.8 million) and Rp 5 billion in income
tax annually.

Under the agreement, distributors will have to bring invoices
for their income tax payments when they file orders for gasoline,
kerosene, diesel, lubricating oil and LPG from Pertamina. The
income tax can be paid through any of the state banks.

"The new arrangement of tax payment will help distributors
improve the management of their businesses," Affandi said.

Hiswana Migas currently has some 2,500 members.

He praised the agreement, saying that the Directorate General
of Tax has also agreed to resolve tax arrears before 1993.

According to the agreement, the rate of income tax on the
sales of the specified petroleum products for private companies
will be set at 0.3 percent of sales prices.

The tax rate charged on Pertamina is set at 0.25 percent of
sales price. (09)