Coal miners demand similar tax incentive given to mineral miners

Petromindo|Lucky

The Indonesian Coal Mining Association (ICMA) has demanded for the government to also provide tax incentive to coal miners similar to the incentive planned for mineral mining firms, Kontan reported on Wednesday.

The paper quoted ICMA Executive Director Hendra Sinadia as saying that in principle, coal contract of work (or PKP2B) is similar to the mineral mining contract of work (or COW). ?PKP2B miners also need regulation that ensures investment stability when their contract expires and convert into IUPK (license),? he said.

The PKP2B miners currently are subject to an income tax rate of 45 percent, the paper said.

As has been previously reported, the Ministry of Finance has completed draft of a new government regulation on taxation in the mineral mining sector, specifically for miners such as gold and copper giants PT Freeport Indonesia (PTFI) and PT Amman Mineral Nusa Tenggara (AMNT) whose mining permit status have been converted from COW to IUPK special mining business license.

The draft of the new regulation, which also regulates government non-tax revenue from the sector, is currently at the State Secretary for finalization before approval by President Joko Widodo.

According to copy of the draft, leaked to the press on Monday, the IUPK miners will be subject to a lower income tax of 25 percent. In comparison, PTFI?s income tax under the COW regime was set at 35 percent. (*)