SKK Migas to Boost Investment with New Fiscal, Non-Fiscal Incentives
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2 January 2023 09:43 WIB
TEMPO.CO, JAMBI - The government is reportedly planning to expand its fiscal stimulus aimed to attract investments in the upstream oil and gas sector, one of which is through policy revision. The Upstream Oil and Gas Regulatory Task Force (SKK Migas) deputy of finance and commercialization, Kurnia Chairi, said the government has discussed plans on revising Government Regulation No.27/2017.
The regulation oversees operational costs that can be recovered and income tax treatment in the upstream oil and gas business sector. "There are several proposed articles that are being relaxed," he said at the Grissik Production Plant, Musi Banyuasin, South Sumatra, Saturday, December 31, 2022.
One of the proposals relates to provisions for adjusting the cooperation contract contractor (KKKS) scheme. Under the current regulations, KKKS holders are only eligible for change six months after the government regulation comes into effect. The government plans to provide relaxation through following revisions.
Kurnia did not go into details about the changes that will be accommodated in the adjusted rules. According to him, the discussion has been going on for quite a long time. "Hopefully in the not too distant future (revised results will be published)" he said.
Apart from fiscal stimulus, Kurnia pledged a variety of non-fiscal incentives such as facilitating and simplifying permits to increase investment in the upstream sector.
SKK Migas is seeking to increase investment in upstream oil and gas which has been stagnant in recent years. From 2017 to 2021, investment realization is in the range of US$10 billion. This year, the target was raised to $13.2 billion.
However, the Head of SKK Migas Dwi Soetjipto estimated the value would be lower at the end of this year, namely around US$12.1 billion, as a lot of companies choose to maintain their cash flow in the midst of post-pandemic recovery.
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