Indonesia promulgates new tax reform policy to boost mining prices to be passed on downstream without affecting supply

SMM8, 10 Feb: yesterday, it was reported that the Indonesian president had issued new tax regulations aimed at prompting mining companies to turn existing contracts into special mining licenses. The Indonesian government is seeking to gain more control over its own minerals. New regulations issued by the Indonesian government set the corporate income tax rate at 25%, in line with the current tax rate in the country. Mining companies will also pay a 4 per cent net profits tax to the central government and a 6 per cent net profits tax to local governments. During the validity of the license, these tax rates, as well as those including mining royalties and land taxes, will not change. Indonesia's presidential office said in a statement that the rule, which has been in force since Aug. 2, is intended to "provide legal certainty" to mining companies holding special mining licenses. Some mining companies, such as Pradama (Riza Pratama), a spokesman for Freeport Mining, said the company would review the new tax rule (Freeport and the Indonesian government have a long dispute over the operation of Grasberg copper and gold mines).