ICMA plans lawsuit against government over new tax ruling

The Indonesia Coal Mining Association (ICMA) said it will file a lawsuit with the Supreme Court against the government if negotiation with the Ministry of Finance to drop a new burdensome tax ruling fails.

This was said by ICMA Executive Director Hendra Sinadia as quoted by Kontan Saturday.

The Directorate General of Taxation has issued a new Tax Regulation No 47/PJ/2015 on land and building tax (or PBB) applied on mineral and coal miners, which is seen as quite burdensome for coal miners amid the current drop in coal price.

Under an earlier ruling, the PBB tax is calculated based on the size of land and construction facilities on top of it. Under the new ruling, which has been effective since January 1, coal or mineral contained in it is included in determining the tax.

ICMA Chairman Pandu Sjharir said that the new PBB tax ruling particularly affects coal miners holding the third generation coal contracts of work (PKP2B) as they have recently signed amendment to their contracts with the government. The amended contracts are subject to new government regulations. (*)