Coal Mining Association urges govt to revoke VAT ruling

Coal Mining Association (APBI) said on Friday it would send a letter to President Megawati Sukarnoputri asking her to annul a government ruling which declared coal as non-taxable goods.

APBI said it had asked the ministry of finance to urge the government to revoke the decree, but so far the ministry had given no response.

?We will ask the President to coordinate with the ministry regarding our complaints,? APBI secretary general Jeffrey Mulyono said in a press release.

The government ruling issued in 2000, PP No. 44/2000, effectively abolished a restitution facility on the 10 percent Value Added Tax (VAT) coal mining firms have to pay when purchasing capital goods and services because the companies can no longer impose VAT on their coal products.

Coal miners complained their costs had increased between 6 and 10 percent because of the new tax policy.

Jeffrey said the tax policy would discourage more investors from investing in Indonesia?s mining sector.

He said as many as 33 coal mining companies with combined potential investments of US$1 billion had revoked and delayed their plans to invest in Indonesia. (leo)