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Coal, nickel miners demand govt to bury planned mining royalties hike
The move to increase mining royalties takes place as the government has seen a more than 30 percent decline in tax revenue that accounted for more than half of state revenue in the first two months of this year.
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Struggling industry: Smoke billows out of the chimneys of nickel smelting plants on July 7, 2024, at the Indonesia Weda Bay Industrial Park (IWIP) in Lelilef village, Central Halmahera regency, North Maluku. (AFP/Azzam Risqullah)
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usinesses have raised concerns over a planned royalty hike on mining products amid a need to boost state revenue, stressing that the move would add more burden to already struggling miners, which were coping with local challenges and global economic uncertainty.
The impending rule, which will be based on the revision of Government Regulation No. 26/2022, would see higher royalty fares for 12 mining products, including coal and nickel, two commodities Indonesia has in abundance.
The Indonesian Mining Association (IMA) executive director Hendra Sinadia said any move to increase tariffs, particularly tax and non-tax revenue, would undoubtedly burden business owners, especially amid a declining trend of certain commodity prices.
“Not to mention [that] operational costs continue to rise. In recent months, challenges for business owners are getting [more] intense,” he told The Jakarta Post on Friday.
Read also: Govt looks to hike royalties for several mining products
He was referring to the more costly mandatory biodiesel program that has led to higher mining operational costs, as well as a new stipulation that would require natural resource exporters to keep their entire export receipts (DHE) onshore for a year from previously a minimum of 30 percent for three months.
Some miners have also complained about the value added tax (VAT) hike from 11 percent to 12 percent that made mining equipment more expensive.
