IMA wants mining law with acceptable fiscal provisions

Indonesian Mining Association (IMA) has warned that mining investors may consider pulling out from Indonesia if the upcoming mining law contains fiscal provisions unacceptable to them.

?Fiscal matters to be included in the mining law should be investor friendly,? IMA chairman Benny Wahju told Petromindo.com on Monday. He did not elaborate.

Wahju said mining investors were eyeing Myanmar and other countries in South East Asia which gave better incentives to them.

IMA top leaders had planned to meet this week with Minister of Energy and Mineral Resources Purnomo Yusgiantoro, Minister of Finance Boediono and other high-ranking government officials to submit their proposals.

IMA had sent a letter to President Megawati Soekarnoputri asking her to annul a government ruling which declared coal as non-taxable goods. The government ruling, issued in 2000, PP. No. 44/2000, effectively abolished a restitution facility on the 10 percent Value Added Tax (VAT) coal mining firms have to pay when purchasing capital goods and services, and accordingly the companies can no longer impose VAT on their coal products.

The government special team tasked with formulating the draft mining bill is about to complete its work, and the President is expected to approve it before the end of this month. The government hopes that the House of Representatives (DPR) will endorse the mining bill before the end of 2002.

If passed, the new mining law will replace the one issued in 1987. (godang)