Tax on coal exports to be imposed if price reaches above US$50 per ton

The government?s plan to raise a five percent tax from coal exports will be implemented only if the price of coal reaches above US$50 per ton, according to Coordinating Minister of Economy Aburizal Bakrie, Koran Tempo reported on Thursday.

Speaking to reporters on Wednesday, Aburizal who is much more popular called by his nickname Ical, said that the decision to link the export tax with the coal price had been made in order to protect small and medium scale coal miners.

?If there is no limitation in the imposition of the export tax, small and medium-scale coal miners could suffer a serious financial problem,? he said. ?With the current price of US$35 per ton, a small coal miner has to pay export tax of at least US$8 per ton. They could shut down their mine operation,? added Ical, the majority shareholder of Bumi Resources, which controls the operation of two major coal producers KPC and Arutmin.

Aburizal said that the export tax would be imposed pending the issuance of the implementation regulation now being prepared by Minister of Trade.

The government?s policy to link the tax with the coal price received a positive response from the association of the Indonesian coal miners. The association?s chairman Jefry Mulyono said that the tax limitation was the right solution. The association earlier criticized the tax policy saying that the export tax would seriously hurt the country?s coal miners? operation. (*)