Tax incentives for debtors

Tax incentives for debtors

JAKARTA (JP): The government will give tax relief to companies
restructuring their debts through the Jakarta Initiative Task
Force (JITF).

The Ministry of Finance said on Saturday the tax relief would
be given to companies that were able to settle their debts in
2000, 2001 or 2002 through JITF.

The task force is a government-sponsored agency formed in 1998
to help accelerate the restructuring of the country's private
sector debt by acting as a mediator.

The tax incentives will be given upon the recommendation of
the Financial Sector Policy Committee, which comprises several
economic ministers and oversees the country's bank and corporate
restructuring program.

The ministry said the incentives would include a 30 percent
deduction in income tax payments for the debt reduction the
companies received from creditors.

The remaining 70 percent can be paid within five years.

The ministry said any transfer of assets made as part of the
debt restructuring program, such as an equity-to-asset swap or a
debt-to-equity swap, would be exempt from income tax. (03)