IMA opposes export tax
Monday, May 7 2012 - 01:41 AM WIB
The association?s executive director Syahrir Abubakar said in Jakarta on Sunday that the export tax which took effect as of May 6 would seriously affect the operation of mining companies especially those which operated under a contract of works (KK).
According to him, all the tax obligation of KK holders are stipulated in the contracts. So, if they are required to pay export tax, their tax obligation in their contracts should be revised. He said that most of KK holders have to spend about 30 percent of their operating profits as payments to the government in the form of royalties, taxes and others.
The energy and mineral resources ministry announced Friday that the government would impose a 20 percent tax on 14 commodities including antimony, bauxite, chromium, copper, gold, iron ore, iron sand, lead, manganese, molybdenum, nickel, platinum, silver and tin, if they are exported in the form of ores.
Meanwhile, the trade ministry also issued regulation to tighten mineral ores exports from mining companies operating under mining permits locally known as IUP. The trade ministry will allow them to export if they meet tight requirements imposed by the energy and mineral resources ministry.
The requirements include their IUP status must be legally clean and clear, they must have paid all their tax and non-tax financial obligations; and they must submit a comprehensive proposal on whether they want to build their own smelters, establish a consortium with other companies to jointly build smelters, or sell their raw materials to smelting companies in the country.
The government?s export tax policy and export restriction were introduced to prevent overexploitation of mineral resources ahead of the government?s plan to totally ban export of unprocessed metals in 2014. (*)