TAXATION a. TAXATION continued

PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Year Ended December 31, 2006 With Comparative Figures For 2005 Expressed in millions of Rupiah, unless otherwise stated 79 26. ESTIMATED LOSSES ON COMMITMENTS AND CONTINGENCIES continued b. By Collectibility: 2006 2005 Current 14,456,257 14,419,537 Special mention 469,192 831,259 Sub-standard 911 329,674 Doubtful 12,425 128,710 Loss 125,973 180,789 Total 15,064,758 15,889,969 Less: Estimated losses 514,399 594,084 Commitments and Contingencies - net 14,550,359 15,295,885 c. Movements of estimated losses on commitments and contingencies: 2006 2005 Balance at beginning of year 594,084 565,898 ReversalProvision during the year 37,670 80 Others 42,015 28,106 Balance at end of year 514,399 594,084 includes effect of foreign currency translation. The minimum estimated losses on commitments and contingencies, under the guidelines prescribed by Bank Indonesia, as of December 31, 2006 and 2005, were Rp300,345 and Rp464,765, respectively. Management believes that the estimated losses on commitments and contingencies provided for is adequate.

27. TAXATION a.

Taxes payable 2006 2005 Bank Mandiri Income Taxes: Employee income tax - Article 21 21,824 42,483 Withholding tax - Article 4 2 175,985 201,611 Corporate income tax - Article 29 1,345,436 - Others 13,756 7,277 1,557,001 251,371 Subsidiaries 25,799 20,730 1,582,800 272,101 b. Tax expense 2006 2005 Tax expense - current: Bank Mandiri only 1,609,549 403,244 Subsidiaries 65,461 97,257 1,675,010 500,501 PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Year Ended December 31, 2006 With Comparative Figures For 2005 Expressed in millions of Rupiah, unless otherwise stated 80

27. TAXATION continued

b. Tax expense continued 2006 2005 Tax benefitexpense - deferred Bank Mandiri only 1,266,454 136,223 Subsidiaries 168 8,378 1,266,286 127,845 408,724 628,346 As explained in Note 2v, income tax for Bank Mandiri and its Subsidiaries is computed for each company as a separate legal entity consolidation is not permitted for corporate income tax filing purposes. c. Tax expense - current The reconciliation between profit before tax benefit expense as shown in the consolidated statements of profit and loss and estimated income tax computations, and the related current tax expense for Bank Mandiri and its Subsidiaries is as follows: 2006 2005 Consolidated profit before tax benefit expense and minority interests 2,831,196 1,232,877 Less: Profit before tax expense of Subsidiaries after elimination 66,696 90,041 Profit before tax expense and minority interests - Bank Mandiri only 2,764,500 1,142,836 Adddeduct permanent differences: Non-deductible expenses 332,524 422,074 Losses from Dili branch 4,876 - Others 194,930 385,373 Adddeduct temporary differences: Overunder provision for loans losses per commercial to allowable tax provision 5,160,826 1,162,641 Write Back and loan recovery 2,371,131 152,003 Under Depreciation of fixed assets per commercial over depreciation per fiscal 23,436 96,839 Financial statement provision for personnel expenses over allowable tax provision 264,876 364,807 Financial statement provision for losses on earning assets other than loans underover allowable tax provision 670,837 610,993 Difference in net realizable value of repossessed collateral over asset value based on tax - 10,451 Difference in net realizable value of abandoned property over asset value based on tax 2,303 31,064 Under provision for estimated losses on commitments and contingencies per commercial over allowable tax provision 46,577 3,106 Under provision for losses arising from legal cases per commercial over allowable tax provision 156,026 280,001 GainsLoses on increase in market value of securities and Government recapitalization bonds 87,001 71,196 Estimated taxable income 5,365,221 1,344,204 Estimated tax expense - current Bank Mandiri only 1,609,549 403,244 Subsidiaries 65,461 97,257 Estimated tax expense – current 1,675,010 500,501 The amount in 2006 includes the write back amounting to Rp2,336,399 and the loans recovery amounting to Rp34,732 to which the deferred tax impact were not computed. The amount in 2005 includes the loan recovery amounting to Rp152,003 to which the deferred tax was not computed. PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Year Ended December 31, 2006 With Comparative Figures For 2005 Expressed in millions of Rupiah, unless otherwise stated 81

27. TAXATION continued