No tax relief for PLN: Finance Ministry
No tax relief for PLN: Finance Ministry
The Jakarta Post, Jakarta
The Ministry of Finance announce on Tuesday that it had rejected
a request for a tax holiday this year from state-owned electric
company Perusahaan Listrik Negara (PLN), because tax proceeds
from the company have already been included in the calculation of
the 2003 state budget revenue.
"There won't be any (tax) relief. PLN has to fulfill its tax
obligation as it has been stated in the budget," Anggito
Abimanyu, the ministry's head of fiscal analysis, said on the
sidelines of a hearing with the House of Representative's budget
committee on Tuesday.
Anggito said PLN would have until December to pay its fair
share.
"PLN has to settle up by the end of the year. The company has
not made any (payments) so far."
PLN made the request due to major financial difficulties that
it claims were brought about by over-investment in
infrastructure.
PLN officials have said that without a tax relief, it would be
difficult for the company to meet further investment targets,
especially as it had not been allowed to raise the electricity
price to consumers between now and next year due to massive
street rallies earlier this year and unwillingness by those
parties in power to raise the rate and risk unpopularity ahead of
the 2004 general elections.
The company has begged off its tax obligation especially in
relation with recent asset revaluation, which on paper, increases
its total asset value, and is thus subject to more income tax.
The asset revaluation strategy is part of efforts to clean up
PLN's finances, especially relating to long-term projects which
began before the 1997-8 rupiah devaluation.
After revaluation, it shows an increase in PLN assets to Rp
197 trillion (US$23.45 billion). This has resulted in a rise in
tax payment to Rp 11.5 trillion.
Anggito said that the company's increase in asset values,
meant more tax payments.
"This applies to all state-owned enterprises, not just PLN.
So, the company still has to pay," he asserted.