Indonesia to Implement Export Duties and Windfall Tax on Coal and Nickel

Jakarta (ANTARA) - The government plans to implement export duties and windfall taxes on coal and nickel commodities as one measure to help alleviate the burden of rising subsidies in the state budget. “Yes, there will be (export duties and windfall tax). But that is still being finalised with the Ministry of Energy and Mineral Resources. I’ll just accept the funds. It’s still being discussed with the Minister of Energy and Mineral Resources, but clearly it will be sufficient to cover our state budget subsidy increase,” said Finance Minister Purbaya Yudhi Sadewa during a media briefing in Jakarta on Monday. For information, windfall tax or unexpected profit tax is an additional tax imposed by the government on companies or certain industrial sectors that suddenly receive large profits due to external conditions. Nevertheless, Purbaya has not yet disclosed the tax rates because the regulations are still in the drafting and inter-ministerial discussion stage. He explained that coal and nickel commodities have not previously been subject to export duties, which often creates opportunities for under-invoicing practices and potential smuggling. “Because the tax is zero, there are no export duties, Customs cannot inspect before the goods depart. So under-invoicing there is very significant,” he stated. With the implementation of export duties, it is hoped that this will provide authority to the Directorate General of Customs and Excise (DJBC) to conduct inspections before goods are shipped. “I request that there be export duties so that if there are export duties, Customs can inspect the goods before departure. Thus, I can control leaks from under-invoicing or smuggling,” said the State Treasurer. On the other hand, the government remains committed to promoting the development of downstream industries, particularly the nickel-based battery sector. To that end, the government is considering providing incentives for industries in that sector. “I mentioned this first to the Minister of Industry. Basically, later, products that use domestic materials will receive more incentives. Something like that. It’s still just being discussed,” said the Finance Minister.