12 Percent VAT Is Still A Burden For Mining Companies, This Is What Nickel Entrepreneurs Say

JAKARTA - Secretary General of the Indonesian Nickel Mining Association (APNI) Meidy Katrin Lengkey revealed the impact of imposing a 12 percent VAT rate which was previously only worn on luxury goods.

Meidy said that the imposition of a 12 percent tax had a major impact on mining industry players as a whole, not only nickel miners.

"There will definitely be. It has a huge impact on mining companies," he said in the Mining Zone quoted on Tuesday, January 21.

He detailed that the increase in VAT would increase the production costs of mining companies, including cost for employees, and mining equipment.

"It's a heavy equipment, including luxury goods. So the price of heavy equipment is quite significant," added Meidy.

In addition, he continued, this increase had an impact on the rising fuel price, on the other hand, mining companies were also forced to use green energy, renewable energy, including the use of electric vehicles.

"We are forced to green energy or renewable energy, if we are forced to use EVs, there is no supporting infrastructure either," explained Meidy.

Furthermore, Meidy added that there was an additional burden for business actors after the government imposed a mandatory biodiesel of 40 percent in early 2025.

"After we calculated the cost of production there was an increase. An increase of almost 30 percent," said Meidy.