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)