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Tax dispute leads PGN to book $265m net loss for 2020
The Supreme Court ruled in December that state-owned gas distributor PGN had to pay $278.4 million to tax office for unpaid value-added tax incurred between 2012 and 2013.
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A building owned by state-owned gas subholding company PGN. (Courtesy of/State-owned gas subholding company PGN )
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tate-owned gas distributor Perusahaan Gas Negara (PGN) booked a US$264.77 million net loss last year, reversing the previous year’s net profit, mainly due to a doubled tax dispute expense.
The company’s annual financial report shows operational income dropped 25.03 percent year-on-year (yoy) to $2.89 billion last year, led by falling gas sales to businesses and by falling crude oil and gas sales, which outpaced an 22.5 percent yoy decline in operational costs to $2.03 billion.
However, the biggest blow to PGN’s profit came from non-operational expenses, mainly its tax dispute expenses that doubled yoy to $278.37 million last year.
“In relation to this tax dispute, PGN will follow existing regulations, but still attempt legal steps to mitigate risks as best as possible,” said PGN finance director Arie Nobelta Kaban in the statement on Saturday.
The Supreme Court ruled in December 2020 that PGN had to pay $278.4 million to the tax office for unpaid value-added tax (PPN) incurred between 2012 and 2013. The sum represents 18 out of 24 PGN-related tax disputes filed by the tax office.
The court is still processing the remaining six disputes worth $38.3 million in unpaid taxes. PGN wrote in the statement that it would pass down the tax dispute expense to its customers.
PGN’s statement also noted that the other ballooned non-operational expense last year was oil and gas asset impairment, which reached $78.9 million, as oil and gas blocks dry up and as the company lets go of other blocks.
