JAKARTA: The government will collect taxes from 14 gas and oil contractors who are indicated to not fulfilling the obligation of share result to the government through the publication of tax underpayment letter.The main issue lies in the content of the cooperation contract involving BP Migas and Ministry of Energy and Mineral Resources decades ago, Directorate General of Taxes Fuad Rahmany told Bisnis.As written on a gentleman agreement, the sharing formula is 85% for the government and 15% for contractor while on the contract government only gets bellow 85%.Directorate General of Taxes will follow Board of Finance and Development Control recommendation and audit result which stands on gentleman agreement.We will issue the letter for 2004 and onward contracts.Tax treatySuch dispute, he added, is due to tax treaty between the government and oil and gas countries. On the tax treaty, contractors tax liabilities are smaller than they should with vary percentages between countries.Tax treaty with England is 10% (Income Tax tariff), while with US is 20%.Following the regulation, Income Tax tariff for contractors is 20% yet they insist to occupy tax treaty of which the tariff is only 10% so Indonesia potentially lost 6.5%.It is important for now to improve contract terms in the future and renegotiate the existing contracts before they expire, said Fuad. (t05/msw)

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