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)