You are here

Indonesia to impose coal export tax next month: govt official

[JAKARTA] Indonesia will impose a 1.5 per cent tax on coal exports from next month, government officials said on Monday, in a bid to boost state revenue and keep more of the power station fuel at home.

The world's top thermal coal exporter will introduce the tax on Aug. 8 for firms with newer mining licences, known as IUPs. "It only applies for IUPs and traders who export coal," Gultom Guska, senior coal official with the mines ministry, told Reuters.

Larger, older generation firms with so-called Contracts of Work, such as Bumi Resources and Berau Coal Energy , will be unaffected, he said.

Indonesia ships about US$2 billion of coal a month, but it wants to keep more of the fuel to feed ballooning domestic power demand and also wants more revenue from the mining sector. "This new regulation at the end is to increase state revenue. So far we haven't gotten any complaints from the coal association nor producers," said Bambang Gatot, the ministry's director general of coal.

Around 900 of the 960 coal firms in production are IUP permit holders, contributing around 80 million tonnes or 20 per cent of total output.

President Joko Widodo's administration plans to build 35 gigawatts of new power stations by the end of the decade and a further 35 gigawatts by 2025, although critics say the target is unlikely to be met due to limited infrastructure and investment.