Indonesia will remove a land tax for companies exploring for geothermal energy resources next year, according to a finance ministry regulation signed last week. (B1 Photo/Danung Arifin)

Indonesia to Remove Land Tax for Geothermal Exploration in 2017: Fin Ministry

BY :GAYATRI SUROYO

NOVEMBER 24, 2016

Jakarta. Indonesia will remove a land tax for companies exploring for geothermal energy resources next year, according to a finance ministry regulation signed last week.

The decree, which was uploaded to the ministry's website on Thursday (24/11), cited that any company that holds a permit for a geothermal business and is still in an exploration stage can receive a 100 percent reduction in land tax every year for up to seven years.

The new rules were intended to "increase the production of renewable energy ... and to support the acceleration of the 35,000 megawatt power project," the decree mentioned, referring to President Joko Widodo's target for Indonesia's power capacity by 2019.

Renewables have so far played little part in Indonesia's power sector, despite the country sitting on the world's biggest geothermal reserves and being bathed in sunshine, crowded out by an abundance of cheap coal and bureaucratic bottlenecks.

But declining costs for renewable electricity and a new push by Widodo to develop renewables in the remote eastern parts of the archipelago are changing the picture.

Reuters

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