Government Regulation Regarding Coal Mining Business Passed, Government Sets Royalty Rates Of 14 Percent

Illustration. (Photo: Pixabay)

JAKARTA - President Joko Widodo (Jokowi) has officially signed Government Regulation (PP) No. 15 of 2022 concerning Treatment of Taxes and or Non-Tax State Revenues in the Coal Mining Business Sector on April 11, 2022.

The Director of Coal Business Development at the Directorate General of Mineral and Coal at the Ministry of Energy and Mineral Resources (ESDM), Lana Saria explained, in the imposition of the Coal Non-Tax State Revenue (PNBP) tariff, a Generation 1 Coal Mining Concession Work Agreement (PKP2B) is distinguished with PKP2B Generation 1 Plus.

She detailed that Generation 1 PNBP rates are in the range of 14 percent to 28 percent according to each Reference Coal Price (HBA) and for Generation 1 Plus it is in the range of 20 percent to 27 percent, but specifically for domestic coal sales. set the same, namely at 14 percent.

"For domestic coal sales, PNBP is locked at 14 percent," Lana said in a Virtual Press Conference on Presidential Regulation Number 55 of 2022 and Government Regulation Number 15 of 2022, Monday, April 18.

Lana further detailed that the determination of the coal royalty rate for domestic sales of 14 percent was implemented taking into account the domestic selling price of coal, which was also pegged at 70 US dollars per ton for power generation. Meanwhile, industries such as cement, fertilizer, and others are set at 90 US dollars per tonne.

He continued, the difference between Generation 1 and Generation 1 Plus PKP2B lies in the rules for imposing Income Tax (PPh) and Value Added Tax (VAT).

"For Generation 1 PKP2B and Generation 1 Plus, the PNBP rate is indeed imposed at the same 13.5 percent, but the difference is the tax imposition. The PKP2B Generation 1 tax reaches 45 percent according to the contract, while Generation 1 Plus the tax is prevailing law or follow the rules," he said.

For information, previously the Ministry of Energy and Mineral Resources has released the Reference Coal Price (HBA) for April 2022. It was noted that the HBA in April rose 41.5 percent to USD 288.40 per tonne from March which was only USD 203.69 per tonne.