XL to Obey Tax Regulation

TEMPO.CO, Jakarta - PT XL Axiata's head of investor relations, Feiruz Ikhwan Malek, said in merging with PT Axis Telecom Indonesia, the company will comply to tax regulation. He denied the allegation saying the merging of both companies will bring about tax avoidance.

Feiruz said the acquisition value of US$865 million will be the responsibility of Axis majority stakeholder, Saudi Telecom Company, through its subsidiary, Teleglobal Investment BV.  "It is normal to calculate the debt from the company that will be acquired in this merging. We will pay it and will not avoid tax of US$864.9 million," he told Tempo yesterday.

Feiruz went on to say before any official decision on the merging, XL and Axis Telekom are two different companies. Thus, there will two balance sheets for tax and profit payments. The merging is targeted to finish by the end of the first quarter of 2014.

Center of Indonesia Taxation Alaysis' executive director Prastowo said the merger between XL and Axis could potentially cause tax avoidance. "Namely on Axis’ debt payment mechanism to existing stakeholders," he said.

Communication and Informatics Ministry spokesman Gatot S. Dewa Broto denied that merger between XL and Axis will reduce state income. According to him, the merger will increase state non-tax income.

"The positive impact from that merger is that the country will gain additional non-tax income of one trillion rupiah," he said.

GALVAN YUDISTIRA