Energy Ministry Prepares Tax and Royalty Scheme for Upstream Oil & Gas

By Editorial Team 27/04/2022
Summary

The Ministry of Energy and Mineral Resources (ESDM) is working on a tax and royalty scheme in the upstream oil and gas cooperation contract system sector this year. Director-General of Oil and Gas Tutuka Ariadji said the move was to improve investment interest in Indonesia's upstream oil and gas sector. ESDM Ministry is currently reviewing the tax and royalty scheme, in line with the ongoing revision of Law No. 22/2001 on Oil and Gas.

"We are currently reviewing taxes and royalties whether we can apply them or not, of course, we need to change the Law [Oil and Gas]. We'll see how we can work on that," Tutuka said on Tuesday. He revealed that Indonesia is not competitive enough in the competitive index, while the internal rate of return for investment in the upstream oil and gas sector has recently been lower. Therefore, the government is working hard to improve Indonesia's competitiveness, starting with changes in terms and conditions for oil and gas cooperation contracts contractors.

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