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RI eyes oil and gas investment boost with new gross split tax rule
The updated stipulations, which will include changes in indirect taxes and domestic market obligation (DMO) fuel pricing, are expected to be released “soon”.
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Attracting investment: An oil rig operates on April 2, 2023, in an oil and gas field managed by Pertamina Hulu Energi Offshore North West Java (PHE ONWJ) near Indramayu, West Java.
(Antara/Aditya Pradana Putra)
T
he government is finalizing revisions of tax stipulations under the gross split profit-sharing contract (PSC) scheme, hoping the amendment could attract more investments in the upstream oil and gas sector.
Djoko Siswanto, head of the Upstream Oil and Gas Regulatory Special Task Force (SKK Migas), said the updated stipulations, which will include changes in indirect taxes and domestic market obligation (DMO) fuel pricing, are expected to be released “soon”.
He went on to say that the monitoring and evaluation process will be based on a single investment parameter conducted by SKK Migas and the Energy and Mineral Resources Ministry, which would no longer involve the Finance Ministry.
The gross split scheme has undergone several revisions following input from contractors, with 46 contracts now using the scheme since its launch in 2019, according to Djoko.
“Initially, the gross split model had too many variables to qualify for incentives. We realized the need for simplicity,” he said during a plenary session at the International Petroleum Association (IPA) Convention & Exhibition event at ICE BSD City, Tangerang, on Tuesday.
SKK Migas head of accounting Desti Melanti said in the same event that the new policy has been discussed several times. She explained that the task force is preparing to finalize the revision of Government Regulation (PP) 53/2017, which regulates tax for gross split PSCs.
Tri Winarno, the energy ministry’s acting oil and gas director general, emphasized Indonesia’s commitment to improving its investment climate. He said the government has been giving a higher profit-sharing percentage to contractors operating in frontier areas
