Mining investors' hope from the new government
Wednesday, July 25 2001 - 04:17 AM WIB
Mining investors are of the opinion that the change of the government gives new positive hopes. They expect that various problems and barriers for mining investment in the country could be tackled by the new administration.
The Indonesian Mining Association (IMA) contends that following the implementation of increased regional autonomy, many new taxes and levies are imposed to mining companies, that have effectively raised their costs by 10 percent.
Vehicles taxes, for instance, has been slapped for vehicles operating in mining fields, while most vehicles operating in mining fields do not use public roads. And therefore, such taxes should be reviewed again so that it would not burden mining companies.
In addition, a number of local administrations have imposed their own taxes and levies. The Lampung administration, for instance, has introduced double levies for vehicles transporting coal passing Lampung areas. First levy is imposed for coal-loaded vehicles passing certain areas in Lampung, then the second levy is again slapped when the vehicles enter Lampung's port.
IMA executive director Paul L. Coutrier said that levies introduced through by-laws are not imposed for large ports like Lampung port, but also in smaller ports such as vessel stopping sites at riverbanks.
"In fact, there is a regulation on taxation for coal transportation, but still, mining companies have to pay more," he said.
Therefore, Coutrier hoped that the new government under President Megawati Soekarnoputri would be responsive enough and, therefore, it would move to improve mining investment climate.
"What's certain is that investors or businessmen will always abide by government regulations. But they must be less burdening," he said.
Meanwhile, Director General of Taxes Hadi Purnomo said that his office had never received complains from mining investors following the introduction of new taxes for them, including taxes for vehicles operating inside mining fields.
Therefore, Hadi said his office would continue to implement the existing regulations, without exception, unless, mining investors presented their complaints or suggestions to the taxation office.
"To create a collective understanding among us, both side must be honest and open. Please do come to us if there are something bothering," he said.
Hadi said his office was seeking inputs and suggestions from mining investors so that it would be able to give leeway or some incentives for mining investors so that it would create a conducive and attractive climate for investment.
"We are still seeking a kind of proper incentives. Therefore, we need inputs from all parties, either from the government, mining companies or oil and gas companies," he said.
Hadi said the current incentives and also regulations on mining and oil and gas exploration in Indonesia are actually still adequate to attract foreign investment. The only problem Indonesia is facing is the issue of political and security problems.
"If these problem can be tackled, with our existing facilities, I'm optimistic that many investors will still come to Indonesia," Hadi said.
Nevertheless, following the induction of the new President, it is fair to expect that the new government would give better service and provide better climate for investment. (*)