Proposal to abolish property tax for geothermal exploration area, Indonesia
Lahedong Geothermal Power Plant in Indonesia (source: ADB, Courtesy of CPI)
Alexander Richter
4 Nov 2015
Ministry of Energy and Mineral Resources in Indonesia has proposed to abolish the property tax for geothermal exploration areas to help push investment into geothermal development in Indonesia.
Reported from Indonesia, the country’s Energy and Mineral Resources Ministry has sent a proposal to Indonesia’s Ministry of Finance asking it to abolish the property tax (PBB) for geothermal exploration area. It expects this move could promote investment into geothermal development.
“Geothermal investment is high cost and high risk,” said the Energy Ministry’s geothermal director Yunus on Tuesday. Exploration has been considered a taxable activity, even though there is no guarantee that investors will find geothermal potential.
Investors also find it difficult to seek loans to boost their businesses because banks know that the economic value of exploration is still low.
New Renewable Energy and Energy Conservation director general Rida Mulyana previously said exploration cost can reach up tp US$10 million per well.
The government has actually provided convenience for geothermal investment by removing value-added tax and import duty for imported goods used in geothermal activities to achieve the high target of 4,600 megawatts in the use of geothermal in power generation system in the next five years.
The Indonesian Geothermal Association appreciated the proposal to remove PBB. Abadi Purnomo, the association’s chairman, said the proposal would contribute in alleviating burdens for investors who are interested in developing national geothermal energy.”
Source: Tempo.co
