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Only 29 percent of mining companies pay tax

Detik Finance - September 7, 2015

Lani Pujiastuti, Bogor – Currently there are 10,922 companies holding Mining Business Permits (IUPs) in Indonesia. Of this total, only 29 percent pay tax.

Corruption Eradication Commission (KPK) research and development directorate staff member Abdul Aziz revealed that data from the Ministry of the Environment on the status of the mining concession zones based on the results of a map overlay of national forestry regions shows that mining concessions throughout Indonesia cover 38,894,231 hectors comprising 7,468 mining ventures.

He then showed data from the Tax Directorate General's office for the period 2010-2012 indicating that only 29 percent of IUP holders pay tax.

"IUP holders represent 7,834 companies from a total of 10,922 IUPs that have been issued. Only 76 percent have NPWPs (taxpayer registration numbers) or a total of 5,984 IUPs. Unfortunately, although they have NPWPs, those that diligently pay tax are only 29 percent of all IUP holders or a total of 2,304 IUPs", explained Abdul Aziz during the Journalists EITI Workshop at the Novotel Hotel in Bogor, West Java, on Monday September 7.

As a consequence, between 2014 and 2015 there were 1,087 whose IUPs were revoked. The majority were in Jambi (South Sumatra) totalling 171 IUPs, Central Sulawesi with 148 IUPs and East Kalimantan totalling 96 IUPs.

Aziz added that based on data from the Department of Energy and Mineral Resources for August 2015, IUPs with a Clean and Clear (CnC) status only numbered 58 percent of all IUPs.

"The IUPs with a Clean and Clear status totaled 6,264 representing 3,787 from the minerals sector and 2,477 from the coal sector. There are still 42 percent that have yet to obtain a CnC status or a total of 4,563 IUP [holders] from the mineral sector and 3,151 from the coal sector. This includes 1,739 new IUPs from rock based commodities", he explained.

Aziz added that as a result of the large number of mining companies not paying tax, the state has suffered trillions of rupiah in financial losses.

"Between 2003 and 2011 unpaid [tax] obligations from IUPs amounted to as much as 3.342 trillion rupiah, PKP2B [Work Activity and Coal Mining Agreements] amounting to as much as 3.433 trillion rupiah and Work Contracts amounting to as much as 1.532 trillion rupiah", he said. (rrd/rrd)

[Translated by James Balowski for the Indoleft News Service. The original title of the report was Dari 10.922 Perusahaan Tambang, Hanya 29 percent yang Taat Bayar Pajak.]

Source: http://finance.detik.com/read/2015/09/07/180324/3012479/1034/dari-10922-perusahaan-tambang-hanya-29-yang-taat-bayar-pajak.

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