BKPM Suggests Freeport Comply with Principals of Equality

TEMPO.CO, Jakarta - The Investment Coordinating Board (BKPM) and the Finance Ministry were in talks with PT Freeport Indonesia today to discuss state revenue and Freeport’s mining activities at the Energy and Mineral Resources Ministry. 

“The BKPM provided [Freeport] with suggestions because Freeport’s activities are related to investments,” BKPM head Franky Sibarani said on Tuesday, December 23, 2014, without specifying the suggestions. 

Franky explained that Freeports mining activities must comply with the principals of government-investors equality, since they must benefit both the people and the state. 

Among the principles of equality in investment, Franky said, was utilizing local content in building smelters. 

Deputy Finance Minister Mardiasmo said, in addition to investment, the government was currently focusing on state revenue as one of its goals was to allow more fiscal space. 

“The Energy and Mineral Resources Ministry must be careful in providing fiscal incentives,” he said. 

According Mardiasmo, the government must be careful in imposing corporate income, royalty and individual taxes to optimize state revenue without overlooking companies’ rights and duties. 

Earlier in July 2014, Freeport signed a memorandum of understanding (MoU) on contract renegotiation with the government. However, the MoU has yet to be followed up with contract amendment since the government and Freeport need to agree on the amount of the taxes to be paid. 

AYU PRIMA SANDI