Coal association says Japan?s coal tax formula to hurt Indonesian export
Tuesday, May 6 2003 - 01:19 AM WIB
ICMA chairman Jeffrey Muljono said Japan plans to impose a flat tax on coal import regardless of the coal quality.
He said this would make Indonesian coal less competitive in the Japanese market as most the country's coal export are subituminous coal with relatively lower calorific value compared to Australian coal.
?Suppose Indonesian coal price is US$20 per ton and Australian coal is $30 per ton. If the Japanese government imposes a flat tax of $2 per ton, then Indonesian coal will be 10 percent more expensive, while Australian coal is only 6.7 percent more expensive. That would give incentive to Japanese buyers to shift to Australian coal, which is not fair,? said Jeffrey.
Japan?s Ministry of Energy, Trade and Industry plans to impose tax on coal starting October this year with initial rate of $2 per ton, ramping up to $6 per ton in 2007. The proposed tax measure is part of an effort to overhaul the government?s Special Energy Account, which funds the development of clean energies and energy-related infrastructure, as well as for reducing greenhouse gas emissions.
Jeffrey said ICMA would meet with Indonesian ministry of energy and Mineral Resources soon to convey ICMA?s grievances and would urge the ministry to lobby METI for a more ?just? taxation structure.
?The taxation should be based on the coal calorific value, which means lower calorific value coal should be imposed lower tax. Beside I think Japan?s government should also give credit to lower ash and sulphur content,? Jeffrey said.
He added that Indonesian government should pay serious attention to the matter, as Japan absorbed around 20 million tons of Indonesian coal production in 2002, which represented 13 percent of annual Japan coal import. Japan imported 90 million coal from Australia in 2002 and 28 million tons from China.(alex/godang)