Tax reform in mining sector needed: Surna

The government needs to review its taxation system in the mining sector to help encourage equal development of the upstream and downstream mining industries, according to Director General of General Mining Surna Tjahja Djajadiningrat.

Speaking at a seminar on mining, Surna explained that the tax reform in the mining sector should be conducted in parallel with tax reforms in other sectors, so that Indonesia's taxation system would be united and not differentiate among sectors.

"If one sector is over-taxed without considering the wider perspective, thus the opportunity for a synergy in development will decrease," Surna said.

He noted that taxation should not be seen from a narrow perspective, from sectoral view, but from greater perspective, putting the mining sector in the whole system, as mining sector as an integral part of the whole system. This way, he said, taxation would be one of the factors that would attract investment.

In a bid to attract more investment in the mining sector, he had submitted a proposal to the minister of energy and mineral resources, in which he also included an item of tax reform in the mining sector.

But he declined to go into details.

"We are still drafting that, and I still don't know the criteria and it must be comprehensive," he said.

Earlier, he revealed that his office was prepared to provide tax incentives to investors in the general mining sector in a bid to attract more new investment in the sector as investment in the mining sector had been stagnant for the past few years due to the crisis. (*)