Coal miners suggest output quota as opposed to export tax

As the government is drafting regulation on the possibility to restrict coal export, the Indonesian Coal Mining Association (ICMA) suggested the government to apply production quota system rather than imposing export tax since the coal miners currently pay different levels of tax to the government.

The association's Executive Director Supriatna Suhala said that it had sent a letter to the Finance Ministry?s fiscal agency to explain the situation faced by coal-mining companies.

?If the government applies the export tax, the first generation of contract holders (PKP2B) will be heavily burdened, they may also bring the regulation to arbitration. The export tax is a good idea as long as all companies are on a level playing field;? he said as quoted by The Jakarta Post.

He said that the first generation contracts of work pay 30 percent royalty to the government plus corporate tax at 45 percent, while the holders of mining business permits

IUP] pay only around 13.5 percent with 25 percent corporate tax.

Energy and Mineral Resources Minister Jero Wacik said earlier that the government would also issue regulations to control coal production and trading.(*)