land tax removal for geothermal business permit holders in 2017

Indonesia contains huge potential in terms of geothermal energy having about 40 percent of the world’s total geothermal reserves. However, this potential remains largely untapped. Indonesia only uses about 5 percent of its geothermal capacity.Still, the government is eager to boost the role of geothermal power within the country's energy mix and the government's ambitious 35,000 MW power program. Government decided to remove a land tax for companies that explore geothermal energy resources through a new decree. In 2017 this land tax will be scrapped for all companies that hold a geothermal business permit and are still in the exploration stage. According to information released on the website of Indonesia's Finance Ministry companies are entitled to a 100 percent tax reduction in land tax each year, for up to seven years.Indonesian President Joko Widodo wants Indonesia's power capacity to reach 35,000 MW by 2019, a program that will require heavy investments. Considering rapid economic expansion and an expanding population, electricity demand in Indonesia is growing sharply each year. Currently, the nation's electrification ratio is only approximately 81 percent, implying there are millions and millions of Indonesians who are not connected to the electricity grid (while many businesses complain about blackouts damaging their earnings).