Local and foreign mining investors will get similar tax treatment: Official

Local mining investors will pay taxes as much as foreign investors will do in the future under the new Mineral and Coal Law, according to a senior official at the Ministry of Energy and Mineral Resources.

Currently, some local investors complain that they pay higher taxes than foreign investors do. This is because local investors hold the so-called ?mining contract? (KP) while foreign investors hold ?contract of work? (CoW). The KP holders pay taxes as much as stated by the existing regulations, which continue changing. Meanwhile, the CoW holders are protected from changes in tax policy as they pay taxes as much as stated in their contracts.

Director general of mineral and coal resources Simon F. Sembiring was quoted by Investor Daily as saying on Friday that under the Mineral of Coal Draft Law, which is now being debated by the government and the House of Representatives, the government would no longer issue CoW. As such, local and foreign investors will pay similar amount of taxes.

Simon also said under the new Mineral and Coal Law, foreign and local mining investors would also be required to set up partnership with state owned mining companies.

The paper however did not specify the reason behind such requirement. (*)