Govt may fail to meet revenue target amid mining downturn

The government may fail to meet this year?s non-tax revenue target from the mining sector amid the lingering drop in the prices of coal and minerals.

Bisnis Indonesia reported on Thursday that realized revenue including from royalty as per August 15 reached Rp 19.7 trillion, or only 37.7 percent of the full-year target of Rp 52.2 trillion.

Sri Rahardjo, Director of Coal and Mineral Management Program at the Ministry of Energy and Mineral Resources, however, said that the government for now would not revise the full-year revenue target.

?It?s indeed still far, but the target will not be revised,? he told the paper.

Sri explained that one of the strategies to help meet the target is by intensifying collection of arrears owed by mining companies to the state including in terms of royalty and fixed fees.

The government initially planned to raise the royalty tariff of coal this year to help meet the Rp 52.2 trillion non-tax revenue target, which is a 47.08 percent increase from Rp 35.49 trillion realized last year. Coal has been the largest contributor to the non-tax revenue as the performance of the mineral sector has been greatly undermined following the introduction of mineral ore export ban early last year. But the current drop in the price of coal has prompted the government to cancel the planned royalty hike. (*)