Govt issues decree to tax coal export

Ministry of finance announced on Tuesday that it had issued a decree to impose 5 percent tax on Indonesian coal export.

Ministry of Finance Jusuf Anwar said the decree was signed on October 11 and had become effective immediately.

Under the decree, coal exported from Indonesia would be subjected to 5 percent tax based on the commodity?s FOB price.

Indonesian Coal Mining Association (ICMA) chairman Jeffrey Muljono said that the decree would not be effective as Indonesian coal producers, which got their licenses under Coal Contract of Work (CCoW) first generation, are fully protected against additional levies from the government.

Jeffrey said first generation miners such as Arutmin Indonesia, KPC, Berau Coal, Adaro Indonesia and Kideco Jaya Agung as the right to reclaim export tax they have paid to the government. CCoW first generation clearly guards miners against additional levies. More over the first generation miners account for around 90 percent of Indonesian exports,? said Jeffrey.

Jeffrey said the tax would clearly reduce Indonesian competitiveness against other producers such as Australia, South Africa and newly emerging producers such as Vietnam.

Indonesia is currently the world?s second largest thermal exporter aiming to grab world?s top exporter top position from Australia by targeting to export 110 million metric tones of coal this year.

ICMA said it would ask for formal legal opinion from its lawyers before taking further step on the matter. ?Once ICMA gets legal opinion, we?ll decide our next step, including asking then government to review the decree,? he said. (alex)