Mining firms ask government to reduce tax payment

Indonesian mining companies have formally asked the government to lower tax payment, which is now equivalent to 65 percent of their income to between 35 percent and 40 percent, Koran Tempo reported on Thursday.

The request was made by deputy chairman of the Indonesian Chamber of Commerce and Industry (Kadin), A.M. Kusumo during a meeting with Minister of Energy and Mineral Resources in Jakarta on Wednesday.

Speaking following the meeting, Kusumo said that the high tax payment might discourage investment in the country?s mining sector. ?We propose the government to reduce tax payment to between 35 and 40 percent,? he said.

At present, mining companies have to pay 11 types of taxes. The royalty tax imposed on gold mining companies, for example, reached 3.5 percent.

In addition, the mining companies are also required to pay tax for the operation of heavy trucks or other heavy equipment even though such equipment are only operated within the mining companies? mining areas.

Director General of Geology and Mineral Resources Simon Sembiring said that the government understood the local mining companies? complaint. ?It is normal if they demand lower tax payment,? he said.

But Simon said that the main impediment that discourages investment in the mining sector is not the amount of the tax payment but the uncertainty in tax regulations.

He said that in addition to taxes imposed by the central government, the mining companies are also required to pay different kinds of levies imposed by local governments.

According to him, such a problem is not only faced by mining companies but also non-mining companies. He said that the government is currently drafting a new tax law to streamline the tax policy and also to avoid double tax payment. (*)