Do you know...<\/p>\n
Under current regulations, mining companies must pay the
\ngovernment royalties of 13.5 percent from coal production, and
\n2.5 percent of net profits from gold and copper mining
\noperations.<\/p>\n
The mining companies are also required to pay land rent of
\nabout US$2 per hectare and various taxes including property tax
\nand income tax of between 30 percent and 35 percent. In addition,
\nthey have to pay a 10 percent value added tax and import duties,
\nand 7.5 percent tax dividends.<\/p>\n
Government regulation No. 344\/KMK.06\/2001 on the distribution
\nof state income from natural resources-based companies, clearly
\nstates that 80 percent of revenue from royalties and land rent
\nwill be allocated to local governments, and the remaining 20
\npercent to the central government.<\/p>\n
Of the 80 percent of land rents paid to local governments, 16
\npercent goes to the provincial administration and the remaining
\n64 percent to the regency administration where the mining
\ncompanies are located.<\/p>\n
The distribution of the local government's revenue from mining
\nroyalties is slightly different from that of land rent. The
\nprovincial administration receives 16 percent and the regency
\nwhere the mining companies are located gets 32 percent. The
\nremaining 32 percent is equally distributed among other regencies
\nand municipalities in the province. In addition to this revenue,
\nlocal governments also receive part of the property taxes paid by
\nmining companies.<\/p>\n
The total payment mining companies are required to make to the
\ngovernment is among the highest in the world. But local
\ngovernments, especially in regencies where the mining companies
\noperate, cannot fully enjoy the benefit of the mining
\noperations in their areas.<\/p>\n
One of the problems is related to the transfer of royalty
\npayments to the local governments' accounts. Because all of the
\nroyalties and land rents are paid through the central government,
\nthere is often a delay in the transfer of the money to local
\ngovernments. Besides this delay, which in some cases can take up
\nto a year, local governments often complain that the money they
\nreceive is smaller than it should be.<\/p>\n
It is also difficult for local governments to check the amount
\nof royalties and land rent paid by a mining company to the
\ncentral government because of a lack of transparency in the
\noperations of many mining companies.<\/p>\n
A more worrying problem is that many coal mining companies,
\nespecially those located in East Kalimantan, have withheld
\nroyalties, claiming local governments have failed to stop illegal
\nmining in their concession areas. Although the companies
\neventually agreed to fulfill their financial obligations, the
\npayments are often very late, causing financial difficulties for
\nthe regencies, which rely on mining activities to fill the gaps
\nin their budgets.<\/p>\n
The sad fact is that people often blame mining companies
\nwhenever there is a problem in their operations. It is easy to
\naccuse the companies of causing environmental damage, ignoring
\nall the benefits they provide to local economies. --Hendarsyah
\nTarmizi<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/do-you-know-1447899208",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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