West Kutai govt accuses KEM not paying tax
Wednesday, May 23 2001 - 08:30 AM WIB
The West Kutai district administration in East Kalimantan has accused gold mining company PT Kelian Equatorial Mining (KEM), a 90 percent subsidiary of Rio Tinto, of not paying more than Rp 4 billion (US$1=Rp 11,400) in tax to the local government, the local Kaltim Post daily reported on Wednesday.
The paper quoted West Kutai treasurer Y. Marthan as saying that the administration had invited the management of the company to discuss the problem, but the invitation was rejected.
"I have invited them twice, but they replied in a letter saying that they won't pay the tax on the basis of the mining contract of work (signed with the central government in Jakarta)," Marthan said.
According to the contract, tax is paid to the central government in Jakarta.
But Marthan said that KEM should pay local taxes in accordance with the Kutai government ruling No 9/1996.
He said that so far KEM had not paid around Rp 4 billion in tax including tax for street illumination, use of local water resource, local retribution, and land and building tax.
Marthan said that KEM should realize that companies operating in the district must pay tax to the local government, which has obtained autonomy since last year.
He said that if the company should talk to the local government if they had problem in paying the tax.
Meanwhile, KEM spokesman Kasan Mulyono said that the company could not pay the tax because there was no legal basis for it, pointing out that KEM's operation was based on the mining contract of work signed with the central government. (*)