Jakarta – A civil society coalition hopes the government will immediately increase levies on the mineral and coal sector to increase state revenues. In a press statement Thursday, January 2, they considered this policy more effective and fair than raising the Value Added Tax (VAT) to 12%, which is feared to burden the community.
Executive Director of the Indonesian Sustainable Welfare Foundation (SUSTAIN), Tata Mustasya, explained that the mineral and coal sector has far greater revenue potential to finance various national priority programs.
“By increasing the coal production levy, the state can get additional revenue of up to Rp 353.7 trillion annually. Compare this with the target of increasing VAT to 12%, which only generates Rp 75.29 trillion. This policy is more strategic and does not burden the public directly,” Tata said. According to him, this levy can be allocated for various strategic projects, including energy transition and clean energy infrastructure development such as smart grids.
Tata said that increasing levies on the mineral and coal sector is also considered to encourage a clean energy transition in Indonesia. The renewable energy mix currently reaches only 13.93% of the 19% target by 2025. To achieve this target, large investments are needed in a short time.
Abdurrahman Arum, Executive Director of Transisi Bersih, proposed imposing a 10-20% export tariff on nickel products. “With this export tariff, the country can gain additional revenue of IDR 50-100 trillion per year. In addition, this policy can also maintain the stability of world nickel prices, which are currently depressed due to large supplies from Indonesia,” he said.
However, to maximise revenue, the government also needs to review downstream policies that have been considered unoptimal. Harryadin Mahardika, Program Director of the Financial Research Center for Clean Energy (FRCCE), highlighted that fiscal incentives that are too large reduce downstream contribution to state revenues.
“The government must be wiser in providing incentives to downstream industry players. There is great potential that has not been maximised, and this must be improved,” said Harryadin.
The coalition encourages the government under the leadership of President Prabowo Subianto to take this step as part of its commitment to economic and environmental sustainability. Such a strategic move would strengthen state revenues and support a more equitable and sustainable development agenda.
“The courage to take rational and fair policies is key. The government has a great opportunity to make significant changes for Indonesia’s economic and environmental future,” Tata concluded. (Hartatik)
