Coal export tax will be reviewed: Economic Czar

Coordinating Minister of Economy Boediono has asserted that the government will review the 5 percent export tax on coal because there is a perception that this tax, which is considered as discriminatory, the Investor Daily Indonesia reported on Friday.

? It?s not going to be cancelled. We will evaluate again every six months,? Boediono said on Wednesday after inaugurating the Coal 2006 at JHCC Jakarta.

Earlier, Minister of Energy and Mineral Resources Purnomo Yusgiantoro has said that the government will review the implementation of coal tax in July 2006. Three ministries ? Ministry of Energy and Mineral Resources, Ministry of Trade and Ministry of Finance ? will work together under the coordination of Coordinating Minister of Economy.

This will be done, Purnomo said, by the government after the completion of the due date set in the Ministry of Finance?s Regulation No.95/PMK/02/2005 regarding imposition of export tax on coal.

?Currently it has been going on for the last three months. After its due date is over, we will review that policy,? Purnomo said.

However, Purnomo is not yet ready to mention whether the tax will be abolished or the percentage will be reduced. Currently, coal export tax is set at 5 percent of weighted average of previous month's prices. Price base is reviewed monthly.

?What is clear is that the government do not want any discrimination or there should be a principle of justice and there should not be effect on the government?s income,? Purnomo said.

The Regulation was issued on Feb. 12 and it will be effective until July 2006.

Indonesian Coal Mining Association (ICMA) has also demanded the government to abolish the coal export tax because it has become a burden for coal mining companies. The association has also filed a judicial review of the Regulation.(*)