Coal-related tax regulation will be soon revised

The tax director general Hadi Purnomo said that the government would soon revise a regulation on value added tax (VAT) so that coal will be no longer included as an object of VAT payment, Investor Daily reported on Wednesday.

"The revision is necessary to ensure that the state's revenue target from coal royalties could be achieved," Hadi said, adding that many coal producers had withheld their royalty payment since the inclusion of coal as an object of VAT payment in 2001.

Hadi said that his office had not set the time limit for the revision of the VAT regulation but he promised the revision would be made as soon as all of the legal aspects of the revision were cleared.

The government had failed to achieve its revenue target from coal royalties since 2001 due the delay in the payment of royalties from several coal mining companies.

In 2004, the state receipts from royalties were only about 95 percent of the target, while in 2003, only about 66 percent of the target. (*)