Local administrations asked to run after mining royalties

The Indonesian Mining Association (API) has told local administrations not to run after mining royalties in a bid to increase their local incomes because that will only scare off investors.

The association's executive director, PL Coutrier, local administrations could only withdraw royalties from mining companies when companies already book profits. Otherwise, they would only kill the companies.

"If there is no mining products, then the government cannot withdraw the royalties from mining companies," he said.

Meanwhile, he said local administrations could still demand taxes from mining companies even when the companies are still in their exploration stage. The taxes that could be withdrawn include income tax, import duties, motor vehicle tax and taxes for the use of heavy equipment.

"Local administrations should keep in mind the integral aspects of local revenues when collecting the taxes," Coutrier said.

Another API executive, Soetaryo Sigit, said that mining companies were still kept at dark by the future of regulations following the introduction of the autonomy law and the maintenance of the obsolete 1967 mining law. While the new mining law No. 11/1997 practically could not yet be implemented because of lacking supporting regulations. (*)