Gov’t to Complete Amendments on Regulations to Increase Non-Tax State Revenue

President Prabowo Subianto leads a meeting with several ministers of the Red and White Cabinet and National Economic Council (DEN) at the Merdeka Palace, Jakarta, Thursday (03/20). (Photo by: BPMI of Presidential Secretariat)

The Government is currently finalizing the amendments to two government regulations to increase non-tax state revenue from mineral and coal sectors.

Minister of Energy and Mineral Resources Bahlil Lahadalia in his statement on Thursday (03/20) explained that discussions regarding the amendments to the adjustment of royalty fees will soon be finished.

“The changes are almost final,” said Bahlil to the media after attending a meeting led by President Prabowo Subianto at the Merdeka Palace, Jakarta.

The Minister added that the meeting also discussed other potential new sources of state revenue including increasing royalties on several key commodities, ranging from gold to coal.

“We discussed strategies to tap into some new sources of state revenue, particularly by increasing royalties in gold, nickel, coal, and other commodities,” said the Minister, adding that the Government is considering further exploration of mineral derivative products that have not yet been included in the state revenue. This effort is expected to support the Government’s downstream strategy to increase the added value of the mining industry.

Regarding royalties, Bahlil explained that royalties are applied to raw materials as well as finished products in order to support the downstream process. The rate varies between 1.5% and 3%, depending on commodity prices in the global market.

“The price is fluctuating. If the price rises, we increase it to the highest rate. But if the price declines, we shouldn’t impose high taxes to the entrepreneurs because we also need businesses to grow,” he explained.

He also ensured that large companies, including PT Freeport Indonesia, will be subject to royalty fees according to the prevailing regulations.

“According to the regulations, we impose the highest tax rate,” he remarked.

With these changes, the Government expects that the mineral and coal sectors can contribute significantly to the non-tax state revenue. These changes are also expected to create a fairer and more sustainable mining industry ecosystem. (BPMI) (EST/MMB)