Mon, 18 Aug 2008
Aditya Suharmoko & Nurni Sulaiman, The Jakarta Post, Jakarta, Balikpapan

The government is gearing up to punish three coal producers found to have been evading royalty payments and income tax over a six-year period, an official says.

Finance Ministry's Directorate General of Taxation Darmin Nasution said Tuesday the three companies evaded nearly Rp 2.5 trillion (US$272.12 million) in taxes between 2004 and 2006.

"I cannot name them because it will only worsen the current dispute (between coal miners and the government)," said Darmin.

The immigration office on Aug. 5 banned 14 executives of six coal firms from leaving Indonesia until January 2009 because they had refused to pay royalties worth a total Rp 3.8 trillion between 2001 and 2005.

However, the Energy and Mineral Resources Ministry said the value of the evaded royalties may reach Rp 7 trillion if unpaid royalties between 2005 and 2007 are included.

The six companies are PT Kideco Jaya Agung, PT Kaltim Prima Coal (KPC), PT Kendilo Coal Indonesia, PT Arutmin Indonesia, PT Berau Coal and PT Adaro Indonesia.

KPC and Arutmin are subsidiaries of PT Bumi Resources, Asia's largest coal exporter, which is partly owned by the family of Coordinating Minister for People's Welfare Aburizal Bakrie.

The companies, represented by the Indonesian Coal Mining Association (APBI), have denied any wrongdoings, saying they held the royalties between 2001 and 2007 as compensation for tax refunds owed to them by the government.

In 2000, the Directorate General of Taxation issued a regulation exempting coal from value-added tax (VAT), meaning companies could no longer claim VAT refunds for goods and services purchased to produce coal.

However, APBI president Jeffrey Mulyono, also Berau Coal president, said the government had violated the first generation contracts of work, under which the six firms are eligible to be refunded.

However, Darmin said the firms had never requested the tax refunds.

"There has been no request for tax refunds made by the companies. What do we have to pay?" he said.

Darmin requested that the companies seek the refunds from the Energy and Mineral Resources Ministry, citing that the refund claimed by the companies falls under a non-tax revenue scheme managed by the ministry.

The Energy and Mineral Resources Ministry's director of coal and mineral development Bambang Gatot Ariyono said six other coal producers had been banned from exporting coal because they had been selling the commodity at unusually low prices.

The companies are PT Antang Gunung Meratus, PT Tanjung Alam Jaya, PT Sumber Kurnia Buana, PD Baramarta, PT Kadya Caraka Mulia and PT Bangun Buana Persada. They have a combined production capacity of around 10 million tons per year.

The ministry has said it will not lift the ban until the firms raise their prices.

East Kalimantan police questioned Tuesday three KPC officials over an allegation the company has been illegally operating in a forest concession owned by the government.

KPC lawyer Neorius said the officials were still being questioned by the police and that the firm could not make comment.

PT Thiess Contractor Indonesia and PT Pama Persada Nusantara are KPC's contractors operating in the disputed area.

KPC's output reached 38.9 million tons last year, or 18 percent of Indonesia's total production.



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