NLA accepts draft acts on petroleum and petroleum income tax

[rooster59]

NLA accepts draft acts on petroleum and petroleum income tax

Thammarat Thadaphrom

BANGKOK, 25 June 2016 (NNT) - The National Legislative Assembly (NLA) endorsed the Petroleum Draft Act and the Petroleum Income Tax Draft Act during its sitting on Friday.

The NLA sitting chaired by its president, Pornpetch Wichitcholchai, heard a statement from NLA member ACM Adisak Klansnoh who claimed that the postponement of the 21st round of bidding for petroleum concessions was not only caused by the opposing group, but responsible agencies should also take some of the blame for the delays. He said although the government was well aware of the problem, it had failed to come up with a solution.

ACM Adisak pointed out that the new petroleum bill will bring about solutions to the conflict through benefit-sharing, the revision of petroleum exploration and production contracts, and the restructuring of petroleum taxation.

He also called on the government to help the public understand the draft law and assure the public that the country as a whole, not individuals, will benefit from the new law.

After the hearing, the NLA voted 152-5 with 16 abstentions to accept the Petroleum Draft Act and voted 154-2 with 17 abstentions to approve the Petroleum Income Tax Draft Act.

The sitting also formed a 21-member committee to study both draft laws in the next 60 days and make appropriate adjustments before sending them back to the legislature.

-- NNT 2016-06-25

[Pib]

ACM Adisak pointed out that the new petroleum bill will bring about solutions to the conflict through benefit-sharing, the revision of petroleum exploration and production contracts, and the restructuring of petroleum taxation.

He also called on the government to help the public understand the draft law and assure the public that the country as a whole, not individuals, will benefit from the new law.

...restructuring of petroleum taxation.....public understand the draft law and assure the public that the country as a whole, not individuals, will benefit...

Political talk for higher taxes on fuel which will increase the country's tax revenue at the public's expense.

[Srikcir]

the postponement of the 21st round of bidding for petroleum concessions was not only caused by the opposing group, but responsible agencies should also take some of the blame for the delays.

The opposing group argued against the concession system as the only system to manage petroleum production under the Petroleum Income Tax Act of 1971. In response the chairman of the NLA committee for energy General Sakol Sajjanit said in May 2015 said that if the opponents of petroleum concessions honestly have different opinions, then it should not be a problem, unless they have a hidden agenda or some ulterior motive.

To that end the committee would consider three other production methods such as production sharing, production to order and government/private joint venture. Now the NLA has decided on a benefit-sharing system. I can't tell if this system is in effect the production sharing system or a fourth system. In any case, it appears that the opponents were correct to have the government allow a different system, albeit cause delay in the bidding.

The expiration of the current concessions is due now in six years. So there should be adequate time to detail the process for a benefit-sharing system, especially if foreign expertise is acquired.

The government should take blame for the delay. But it should also get credit for considering other production methods that might be in the better interest of the nation.