Govt imposes progressive export tax on mineral products
Wednesday, January 15 2014 - 02:29 AM WIB
The Minister of Finance (MoF) has issued a new regulation imposing a progressive export tax on mineral products which have met the minimum processing requirement set by the government.
The ministry said in a press statement on Monday that the export tax for this year will range from 25-30 percent, depending on the commodities, and would gradually increase to a maximum 60 percent by the end of 2016.
According to the new MoF Regulation No 6/PMK011/2014, which is a second revision to earlier MoF Regulation No 7/PMK011/2012, the export tax for copper concentrate with minimum processing requirement of 15 percent is set at 25 percent for this year, and will gradually rise to 60 percent by end of 2016.
The new MoF regulation comes after the government officially banned the export of mineral ores on January 12, 2014 in a bid to generate greater value added from mining commodities for the country by pushing miners to process and refine the ores at domestic miners. But following intensive lobbying by the giant miners and the prospect of severe impact to the economy among others in terms of massive lay off, the government late last week watered down the export ban policy, allowing certain mineral products which have met the minimum processing requirement to continue export until 2017, when new domestic smelters are expected to be ready.
The mineral concentrates allowed to continue export include copper, iron ore, manganese, lead, zinc, and iron sands.
Minister of Finance Chatib Basri was quoted by Koran Tempo as saying that once the export has reached punitive rate of 60 percent, no miners would export the concentrates as they would be making loss, thus forcing them to process it at home.
| No | Description | Export Tax (%) | |||||
| 2014 | 2015 | 2016 | |||||
| From 12 January-30 June | From 1 July- 31 June | From 1 January-30 June | From 1 July-31 December | From 1 January- 30 June | From 1 July-31 December | ||
| 1 | Copper concentrate | 25% | 25% | 35% | 40% | 50% | 60% |
| 2 | Iron ore concentrate | 20% | 20% | 30% | 40% | 50% | 60% |
| 3 | Manganese concentrate | 20% | 20% | 30% | 40% | 50% | 60% |
| 4 | Lead concentrate | 20% | 20% | 30% | 40% | 50% | 60% |
| 5 | Zinc concentrate | 20% | 20% | 30% | 40% | 50% | 60% |
| 6 | Limenite concentrate | 20% | 20% | 30% | 40% | 50% | 60% |
| Titanium concentrate | 20% | 20% | 30% | 40% | 50% | 60% | |
Editing by Reiner Simanjunmtak