Tax Refund Withholding Could Disrupt Mining Industry
The Indonesian Mining Association (API-IMA) has called on the government to review the proposal to withhold tax refunds. IMA Executive Director Sari Esayanti believes this policy could disrupt business stability and company operations in the mining sector.
“We believe the current system is already good. Companies fulfil their obligations and can reclaim their rights if payments made are in excess, or pay the shortfall if underpaid,” Sari said in a written statement on Tuesday, 14 April 2026.
Tax refunds represent the taxpayer’s right to reclaim excess payments deposited with the state. This mechanism, according to Sari, is crucial for maintaining company cash flow and reflecting good governance.
Sari stated that legal certainty regarding refunds is vital for investor confidence. She invited the government to continue collaborating with the business community to ensure sustainable economic growth.
Previously, Finance Minister Purbaya Yudhi Sadewa announced a review of the tax refund mechanism. He emphasised that the policy on returning excess tax payments would not be halted but would be tightened to prevent state revenue leakages.
“It does not mean we are stopping refunds, but we will tighten it so that those who are not entitled do not receive them,” Purbaya said during a working meeting with Commission XI of the DPR at the parliamentary complex in Senayan, Jakarta, on Monday, 6 April 2026.
He noted that the amount of refunds disbursed by the state each year is substantial. In 2025, it reached Rp 361.5 trillion, an increase of 35.9 percent compared to 2024. Purbaya also highlighted that monthly refund reports are not yet sufficiently transparent, raising suspicions of potential leakages.
The Indonesian Employers Association (Apindo) has cautioned that the policy should be carefully reviewed due to its broad impact on the business world. Chairman of Apindo’s Taxation Committee, Siddhi Widyaprathama, stated that refunds are a mechanism regulated by law and must be returned to companies.
These funds play a key role in maintaining cash flow to keep business operations running, from production to fulfilling obligations to workers. He added that legal certainty is a main pillar in creating a healthy investment climate. Consistency in implementing regulations, including the tax refund mechanism, is an important signal for businesses in planning long-term investments and maintaining investor trust.
Professor at the Faculty of Economics and Business, Andalas University, Syafruddin Karimi, views the withholding of refunds as risking a constriction of space for the real sector. According to him, when funds are held back, companies tend to hold back on spending, production, distribution, and employment absorption. The impact could spread to workers, suppliers, small and medium enterprises, and suppress public purchasing power.
Syafruddin believes that withholding refunds is not an effective step to strengthen fiscal policy. “A strong fiscal position must be built through improvements in administration, supervision, and expansion of a fair tax base, not through withholding taxpayer rights,” he said.