ICMA demands tax office to recognize VAT refund

By Tri Subhki R

The Indonesian Coal Mining Association (ICMA) urged the Directorate General of Taxation to recognize that holders of third generation coal contract of work (CCoW) are qualified for value-added tax (VAT) refund to resolve the long-standing VAT dispute.

?What we?re asking now is (for the tax office) to recognize the VAT restitution, and that (it) should be paid (to the miners),? ICMA Chairman Pandu Syahrir told a press conference at his office on Thursday, adding that such recognition would give certainty for miners to run the coal business in the future.

The refund arrangement, said Pandu could further be discussed with the respective mining companies.

According to Pandu, there are currently 11 coal mining companies which have failed to get VAT refund totaling about Rp1.5 trillion.

Pandu said that the association has discussed the VAT dispute with the Directorate General of Taxation and several high ranking government officials.

?We see there is inconsistency regarding the VAT restitution as some companies have already been paid by the government, while VAT refund for the others is still being withheld,? he said, adding that the third generation CCoW adopts a lex specialis principle, which means that new regulations and laws enacted after the contracts had been signed can?t be applied. As such, the government must pay the VAT restitution to the holders of the third generation CCow as it stipulates coal as VAT-able.

Editing by Reiner Simanjuntak