Coal association sees ?bright spot? over controversial tax policy

The Indonesian Coal Association (APBI) is optimistic that the government would be able to resolve the problems encountered by the country?s coal producers traders due to new tax policy, which creates cash flow problem, according to secretary general of the association Jeffrey Mulyono.

?There is now a bright spot,? Jeffrey told Petromindo.com, referring to initiatives taken by the office of the coordinating minister for the economy to discuss the problems with related parties including the ministry of finance, investment coordinating board (BKPM), and APBI.

The government recently introduced a new ruling exempting coal producers from value added tax, and imposing the VAT on briquette producers. This has created cash flow problem to coal producers and traders. With the new tax policy, coal firms could no longer include VAT in coal prices for domestic sales. In the past, the inclusion of VAT in coal prices enabled coal producers to offset similar taxes imposed on their imported capital goods.

The APBI earlier planned to sue the government over the new tax ruling.

Jeffrey said that the office of the coordinating minister for the economy had asked the association to drop the lawsuit plan. But he said that some association members still insisted that it must proceed with the initial plan.(Godang)