Mining investors do not need tax incentives, but they need business certainty
Saturday, October 13 2001 - 02:50 AM WIB
Kiroyan contended that the current taxation regime was already attractive for mining investors, but if the government maintains the lex specialis system in the taxation for mining sector, it would help.
With such a lex specialis clause, he said, it would give more certainty for investors in doing business here, because they know how much tax they have to pay in the coming years, and thus, it would allow mining companies to make better planning.
"In my opinion, tax incentives are not necessary. What's most important is the legal certainty or rule of law. That's primary, and the government has to do that," Kiroyan said.
He noted that business certainty was more important for mining investors because with business certainty, they could make better planning, and they could also calculate whether their investment would be profitable.
Business certainty could be pursued through various ways, including upholding the law, and thus creating legal certainty, and creating a stable taxation regulation.
Noke also explained that the insistence of coal mining giant in East Kalimantan PT Kaltim Prima Coal (KPC) in its negotiation with the government over the price of shares to be divested to local entity, should be seen as KPC's intention to uphold law so that mining investment in Indonesia would remain attractive.
He noted that international mining community was currently watching closely negotiations between the government and KPC, whose ownership is shared by Rio Tinto and BP, over the price of the shares that to be divested.
"They want to see if the process of share divestment is pursued according to regulations or not. Frankly speaking, the international world is evaluating the (government) decision over KPC," he said. (*)