Provinces demand change in coal royalty payment

A number of coal producing provinces have demanded the government to change the mechanism of the coal royalty payment so that they can receive their parts directly from the coal producers, Bisnis Indonesia reported on Wednesday.

Executive Director of the Association of Coal Producers Bambang Susanto said in Jakarta on Tuesday that some of the provinces had asked them to pay part of the royalty payment directly to the local administration to ensure that they could receive the royalty payment in full.

According to the existing regulation, coal producers are required to pay royalties amounting to 13.5 percent of their production through the ministry of finance. About 20 percent of the royalty payment will be retained by the ministry as the central government?s revenue while the remaining 80 percent should be transferred to the province. A problem, however, often arises because the local governments do not receive the royalty payment in full.

Bambang said that the association?s members did not have any problem if they were required to pay the royalties directly to the provincial authority. "We will pay the royalties directly to the province if the policy is approved by the central government," he said. (*)