Govt urged to provide tax breaks for smelting industry

The Indonesian Mining Association (IMA) has called on the government to provide fiscal incentives for companies building smelting facilities for low-grade mineral ores in order to help them reach an economic scale, Bisnis Indonesia reported on Thursday.

The executive secretary of the association, Hendra Sinadia, said in Jakarta on Wednesday that the proposal was based on the recommendation made by the research agency of the Bandung Institute of Technology (LAPI-ITB), which recently conducted a comprehensive study on the country?s mineral smelting program.

Based on the study, LAPI-ITB said that the processing of low-grade mineral ores should be given tax facilities because they are still considered pioneer industry, which still lacks infrastructure facilities especially power supply. The research agency also calls on the government to reconsider its plan to impose a 6 percent purification threshold for nickel pig iron, due to technology and technical reasons.

Director General of Mineral and Coal at the Energy and Mineral Resources Ministry, Thamrin Sihite, said that the government welcomes any proposals and recommendations for the development of smelting development.

He criticized that many investors just complained without giving any concrete proposals on how to cope with the problems. ?Just say what we should do. Just say, smelting plant construction will not be economically feasible if there are no tax incentives,? he said.

He said that his ministry was proposing the removal of the 10 percent value added tax imposed on smelters as part of the government?s program to ease problems in the construction of smelting plants. (*)