RI Will Lose Revenue Due To The Zero Royalty Policy Percent Of Downstream Coal

Illustration (Photo: Doc. Antara)

JAKARTA - Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira said that giving zero percent royalties to coal companies in Government Regulations in Lieu of the Law (Perppu) on Job Creation is very inappropriate.

According to him, this will have a negative impact on Indonesia.

"The rules for coal downstream products in the form of dimethyl ether (DME) are economically more expensive than LPG imports, so it is very inappropriate to be given incentives," Bhima told VOI, Friday, January 6.

Bhima added that the policy regarding zero percent of coal downstream royalties in the Job Creation Perppu could later cause Indonesia to lose its income.

So, said Bhima, this could affect the government's plan to reduce the deficit in the State Budget (APBN) in 2023, where there is currently a commodity windfall.

According to him, coal downstreaming should be subject to additional taxes, not even getting a stimulus.

"The use of coal is contrary to climate change mitigation efforts, because the emissions produced by coal derivative products remain high. Ideally, the portion of coal royalties has been increased to 15 to 20 percent," he said.

The zero percent rolyati policy of coal downstreaming is regulated in the Job Creation Perppu Article 128A paragraph (2), which reads, "Giving certain treatment to state revenue obligations as referred to in paragraph (1) for development activities and/or utilization of coal can be in the form of imposition of production/royalty contributions of zero percent."