Trade Minister opposes coal export tax

Trade Minister and head of Investment Coordinating Board (BKPM) Gita Wirjawan strongly opposed the government?s plan to impose export tax on coal to mining companies operating under a contract of works (KK), Bisnis Indonesia reported on Thursday.

Under their KK contracts, he said, coal mining companies have been required to pay royalties and taxes amounting to 45 percent. ?If they are required to pay export tax, it could be interpreted as a form of violations of their contracts,? Gita added. He also questioned the rationality of the export tax plan.

Gita said that it would be unnecessary to impose export tax because local coal miners have also been required to sell part of their production to local buyers under the domestic market obligation (DMO).

?If the miner, for example, produces 100 kg, while the domestic demand is only 90 kg, we will have an excess in production of about 10 kg. So, the 10 kg which can be exported should not be slapped with an export tax,? he said.

He said the export tax could be imposed to coal producers which do not comply with the DMO regulation. (*)