Caltex's production continues normally despite student protests
Monday, February 7 2000 - 04:00 AM WIB
Legislator Pramono Anung, a member of the House of Representatives commission VIII on mining and energy, said that he would fully support the effort of the tax office to audit the real "recovery cost" of the state oil and gas firm Pertamina and its foreign oil and gas contractors.
"The tax office can ask it (the recovery cost data) through the House," he said.
Pramono was responding to earlier statement made by M. Tjiptarjo, director for tax planning and revenue at the tax office, that this office had difficulties to exactly calculate how much tax the state could have from the oil and gas sector because the office had no data on the "recovery cost" of the oil and gas sector. He said that the recovery cost was either in the hands of Pertamina or the Ministry of Finance.
Recovery cost is the cost spent by the foreign oil and gas contractors during the exploration stage plus operational cost in the exploitation stage. This cost is first deducted from the oil and gas revenue to be shared between the contractors and the government. The amount of the cost would also decide how much tax the state would have.
Tjiptarjo said that the tax office must have access to the recovery cost data in order to be able to calculate the tax potential from the oil and gas sector.
The April-December state budget targets a oil and gas tax revenue of Rp 8.8 trillion. Tjiptarjo said that this figure came directly from Pertamina and the Finance Ministry.
Meanwhile, Pramono said the House would force Pertamina to disclose the recovery cost data.
"There's a huge potential for tax increase," he said, adding that if there's an indication of leakage or loss to the state, this must be further investigated.(*)