Tax revenue expected to drop following mineral export ban

By Bambang Atmaja

The government?s tax and non-tax income from the country?s mining sector is projected to shrink by Rp 20 trillion (about US$1.774 billion) this year as the broad export ban on mineral ores came into effect on Jan. 12, Director General of Taxation Fuad Rachmany said Monday.

?The decrease of (tax and non-tax) revenue is seen at about Rp 20 trillion, and Rp 6 trillion of it is from tax,? said Fuad, adding that the lower tax revenue from the mining sector would force the tax office to revise the 2014 tax revenue target.

The government earlier this year introduced an export ban on mineral ores including two of the country?s main mineral commodities, nickel and bauxite, require miners to build domestic smelters to process the ores prior to export in a bid to generate greater value added from the commodities.

While the government has acknowledged the expected short-term pains resulting from the policy, it anticipates much gains in the future as new investments are made and new jobs are created in the domestic smelter industry.

Editing by Reiner Simanjuntak