Ministry of SOE to Prioritize Asset Revaluation of PLN and Bulog

KATADATA - Ministry of State-owned Enterprises (SOE) welcomes the planned final Income Tax incentive on asset revaluation. Two big SOEs will be prioritized to revalue its assets.

Minister of SOE Rini Soemarno said that she’s been busy this month gathering data and assessing which SOEs that have the potential to revalue their assets. There are two SOEs that will be prioritized, namely PT Perusahaan Listrik Negara (PLN) in the energy sector and Perusahaan Umum (Perum) Bulog in the food sector.

“I think nearly all SOEs (need a revaluation), but PLN needs it the most and also in the food sector such as Bulog,” said Rini Friday (10/23) in Jakarta. After revaluating their assets, the two SOEs are able to grow their businesses. As for the government, asset revaluation will increase tax revenue potential in the future.

On the same occassion, PLN’s CEO Sofyan Basirs said that he’s currently preparing the requirements and permits to perform asset revaluation this year which will entitle him to tax incentive of three percent. “I have asked Finance Minister (Bambang Brodjonegoro) and he gave his approval. The tax rate will be reduced to 3 percent. That’s really attractive for me," he said.

(Read: Govt Offers Tax Incentive on Asset Revaluation Under Fifth Phase Economic Policy Package)

The government has planned to revaluate the SOEs’ assets for quite some time. Asset revaluation will increase the asset values of 119 SOEs that currently reached IDR4,200 trillion. It’s because the majority of SOEs’ fixed assets are still undervalued because they are recorded based on their acquisition cost a couple years ago.

The plan, however, was hampered by high tax rate of 10 percent. Minister of SOE Rini Soemarno once considered the option to convert tax on asset revalution to state capital participation (PMN) in SOEs so they don’t have to pay the tax.

Now the opportunity to perform asset revaluation is wide open after the government announced the fifth phase economic policy package on Thusday (10/22). The package includes final income tax incentive for companies which revaluate their assets. If they perform asset revaluation this year, the tax rate is only three percent. If they perform aset revaluation in the first and and second semester next year, the tax rate will be four and six percent, respectively.

The tax incentive will encourage SOEs to revaluate their assets that will increase their asset values and give more space to seek new funding. Thus, the company will have more room to expand which will eventually boost the economy. On the other hand, asset revaluation has the potential to increase tax revenue. Directorate General of Tax has calculated that the tax potential from SOEs’ asset revaluation could reach IDR10 trillion.