State revenues from mining sector set to increase to Rp 3.6 trillion

The government's non tax revenues from the mining sector including royalties and land rent are expected to increase by about 40 percent to Rp 3.6 trillion this year from about Rp 2.57 trillion in 2004, Bisnis Indonesia reported on Monday.

Director General of Geology and Mineral Resources at the Ministry of Energy and Mineral Resources, Simon Felix Sembiring, attributed the projected increase in the non-tax revenues from the mining sector to a significant increase in the country's gold, copper and coal production.

The copper production, for example, is expected to increase to 3.75 million metric tons this year from about 2.4 million metric tons in 2004, while gold production is projected to increase to 141,800 kgs from 72.748 kgs last year. Tin production is also set to increase to 66,000 tons from 46,158 tons, while coal production is expected to rise to 161 million tons this year from 132 million tons in 2004.

Under the existing regulation, the government receives 13.5 percent of coal production in royalties from coal mining companies, and 2.5 percent of net profits in royalties from gold and copper mining operations.

The mining companies are also required to pay land rent of about US$2 per hectare and various taxes including property tax and income tax of between 30 percent and 35 percent. In addition, they also have to pay a 10 percent value added tax and import duties and 7.5 percent tax dividends. (*)