Government seeks to collect royalty owed by large coal miners

The Ministry of Energy and Mineral Resources (MEMR), the Ministry of Finance and the Supreme Audit Agency (BPK) plan to launch a joint audit into the massive amount of royalty unpaid by large coal miners particularly those holding the so-called Generation I Coal Contract of Work (or PKP2B Generation I), Kontan reported on Monday.

According to MEMR data, as per end of 2015, the total royalty arrears of the PKP2B coal miners reached Rp 26.2 trillion, about 84 percent of which are owed by the Generation I PKP2B coal miners.

Ministry Inspector General Mochtar Husein said that the coal miners, specifically the Generation I PKP2B miners, withhold their royalty payment to the state as the government has yet to reimburse the value added tax in the purchase of production inputs.

The audit, Mochtar said, is aimed at determining the amount of VAT that must be reimbursed by the government, and the amount of royalty that must be paid to the government by the coal miners. ?BPK wants determine the (amount of) VAT, and the difference (between the VAT and royalty) that must be paid (by the coal miners),? he said. (*)