Govt Agrees to Lower Mineral Export Duty

TEMPO.CO, Jakarta - The Indonesian government finally agreed to lower mineral export tax breaks for mining companies. Deputy Finance Minister Bambang Brodjonegoro said that based on Mining Code coordination meeting, the duty tariff will be adjusted to the progress of smelter development. "It's an incentive for smelters," Bambang said yesterday.

The tariff adjustment would only be given once there is a guarantee that smelter construction will be completed. To monitor the construction progress, the government plans to establish a team that involves several ministries and independent institutions.

In addition to the export tax adjustment, the government will also provide tax allowances. The lenience is still being discussed and will be issued in the form of a government regulation. "Hopefully we can reach an agreement in this week's coordination meetings or the next," said Bambang.

Mahendra Siregar, chief of the Investment Coordinating Board (BKPM), hopes that the discussion will not be protracted. According to Mahendra, companies have already shown huge commitment in building smelters, yet the investment growth remains slow.

Dede Ida Suhendra, director of mineral businesses at the Directorate General of Mineral and Coal, suggested the export duty for mineral concentrates lowered to around 10 percent. Previously, the government has decided that they will raise the duty gradually. For 2014, the export tax is set at 20 percent, and every year it would be raised until it reaches 60 percent in 2016.

ANGGA SUKMA WIJAYA | BERNADETTE CHRISTINA MUNTHE