Purbaya plans coal export duty of up to 5% next year, to tighten DHE policy

By Calvin Purba

Indonesia’s coal miners are expected to face tighter financial requirements next year as the cash-strapped government plans to impose an export duty of up to 5% and revise the existing foreign-exchange retention policy that requires exporters of natural resources to keep their earnings in domestic banks for at least 12 months (the DHE policy).

Finance Minister Purbaya Yudhi Sadewa said on Monday the government aims to begin collecting a coal export duty in 2026, with rates ranging from 1% to 5% depending on coal calorific value. He said the duty will be applied even though the government expects benchmark coal prices (HBA) to fall to US$95–100 per tonne next year, compared with an average US$111 per tonne in 2025.

“Why? Because we subsidize them,” Purbaya told reporters. He argued that coal companies have been benefiting from a regulatory change under the Job Creation Law that reclassified coal as a taxable good, allowing producers to claim VAT refunds.

According to Purbaya, VAT restitution to the coal industry reaches around Rp 25 trillion per year, eroding the state’s net tax revenue. He cited alleged cost inflation practices in the sector that have contributed to negative net VAT receipts. “Instead of a positive net income from the coal industry, with all the taxes, it becomes negative. It is as if the government is subsidizing an industry that is already very profitable,” he said.

Read also: Finance minister signals coal export levy in 2026

Purbaya said the new export duty is intended to restore state revenue and could generate up to Rp 20 trillion next year. “From a competitiveness standpoint there is no issue, and from the budget side our burden from the coal industry will be reduced. These are wealthy companies with large export profits—yet we end up subsidizing them indirectly,” he said.

DHE tightening: exporters to move FX earnings to state banks

The government is also revising Government Regulation No. 8/2025 on foreign-exchange earnings from natural resources (DHE SDA), with the amended rule set to take effect on 1 January 2026. Under the new policy, all exporters of natural resources will be required to place 100% of their export proceeds in foreign currency into special accounts at state-owned banks (Himbara).

Purbaya said the revision is necessary because the current regulation does not specify where export earnings must be deposited, allowing exporters to circumvent the policy. He said many exporters convert their dollars into rupiah, transfer the funds to smaller banks, re-convert them into foreign currency and move them abroad—undermining Indonesia’s foreign-reserve buildup.

“DHE comes in as dollars, but they exchange it into rupiah, move it to small banks, convert it back to dollars and send it overseas. So the policy is ineffective,” Purbaya said.

By centralizing DHE deposits in Himbara banks, Purbaya said supervision will be easier. State banks that fail to retain the funds effectively or to help strengthen Indonesia’s FX reserves can face swift leadership changes. “If Himbara CEOs or directors play around, we can remove them. Easy,” he said. “The goal is to ensure DHE is really effective so that dollar supply here truly increases.”

Updated rules circulated to banks on 5 December indicate that the maximum allowable conversion of DHE foreign currency into rupiah will be cut from 100% to 50%. Exporters will also gain broader flexibility to use foreign currency for procurement of goods and services, not only for items unavailable domestically. They will additionally be allowed to invest export proceeds in domestically issued foreign-currency government securities (SBN valas), which the government plans to issue to absorb excess FX liquidity and deepen the financial market.

The revised regulation will apply in full starting 1 January 2026.

Editing by Reiner Simanjuntak