ISPA suggests higher export tax for copper concentrates

By Tri Subhki R

The Indonesian Smelter and Processing Association (ISPA) suggests the government to impose higher export tax for copper concentrates if copper miners cannot complete the required domestic smelter facility by 2017.

"We suggest higher export tax for copper concentrates as it is only few months away to January 2017," ISPA Chairman R. Sukhyar said referring to the copper smelter construction deadline.

Sukhyar revealed the dilemma that the government is facing in dealing with the condition. It is supposed not to allow copper concentrates export after 2017, but at the same time it may lose revenue if insisting on the export ban. So, according to Sukhyar, higher export tax may be the solution.

Sukhyar said that the the higher export tax should be imposed to Contract of Work (KK) holders only, but not to mining business permit (IUP) holders. It means that there will be selected amendment of Law No 4/2009.

On the other hand, Sukhyar also reminded the government about the importance of policy consistency, certainty and fair playing field among stakeholders. "It will become government's headache," he said.

Sukhyar also questioned why copper company, particularly PT Freeport Indonesia, insists on exporting its copper concentrate and not selling it to local companies instead. " This is a big question."

Editing by Reiner Simanjuntak