Govt sets deadline for coalmines to pay their royalty arrears
Saturday, June 10 2006 - 02:54 AM WIB
M.S Marpaung, director for coal mine development at the ministry of energy and mineral resources, said in Jakarta Friday his office had sent the indebted coal miners a letter on May to warn them to pay their royalty arrears by the end of this month at the latest.
He said that if they failed to pay their royalty arrears on the deadline they would be declared as defaulters and would be reported to the ministry of finance.
The ministry said earlier that six major coal mining firms including PT Kaltim Prima Coal, PT Adaro Indonesia, PT Kideco Jaya Agung, PT Berau Coal, PT Arutmin Indonesia and PT BHP Kendilo Coal had refused to pay their royalties for the last five consecutive years.
Their total royalty arrears have reached about Rp 3.9 trillion. They refused to pay their royalties on the ground that the government had not reimbursed their value added tax (VAT) payment.
Under the government's regulation No. 144/2000, the first generation coal mining companies including six coal miners are exempted from value added tax (VAT) payment but the tax office insisted that they still had to pay their value added tax.
In addition to the six companies, based on the audit of the state audit agency (BPK), there are 15 other coal companies which have not fully paid their royalties.
Commenting on the threat issued by the ministry, the chairman of the association of the coal mining companies, Jeffrey Mulyono said that he strongly objected the use of defaulter status to be given to the coal miners which failed to pay their royalty arrears.
"The status as defaulter is very sensitive, that is why it is only an international arbitration agency that can be allowed to declare whether or not a company can be considered a defaulter," he said.
He insisted that these mining companies would pay their royalty arrears only after the government reimbursed their VAT payment. (*)