The government has wiped clean Rp 28.1 trillion ($3 billion) in taxes owed by state oil and gas company Pertamina, Finance Minister Agus Martowardojo said on Thursday.
Agus said the Supreme Audit Agency (BPK) found that the tax obligation, in the form of a value added tax, could no longer be collected, as it qualified under the tax code as receipts to be borne by the state.
“The government-borne value added tax of Pertamina, of Rp 28.1 trillion, in line with the results of the examination of the BPK in 2011, cannot be collected anymore and therefore has been wiped clean in line with the prevailing regulations,” Agus told a plenary session at the House of Representatives.
A government regulation stipulates certain exceptions for which the value added tax should be borne by the state, including Pertamina’s oil and gas products and services.
Agus said that by Dec. 31, 2012, the taxes owed to the state would stand at Rp 86.8 trillion, of which Rp 46.2 trillion would not be collectible.
“These uncollectible owed taxes are because they clearly cannot be collected, and include the government-borne value added tax of Pertamina, overdue tax of liquidated banks, overdue oil and gas, land and building taxes and other taxes borne by the state,” he said.
He said the government will study each of the other taxes deemed uncollectible before deciding whether they truly qualify as such.