Jakarta, CNBC Indonesia – The government will impose value added tax (VAT) on coal, as stipulated in the Law on Job Creation recently passed by the House of Representatives (DPR) RI last week (05/10/2020).
Previously, coal was one of the types of goods that were not subject to VAT. However, with the existence of this Job Creation Law, companies are no longer free from this value added tax.
So, what makes the government finally exclude coal from goods that are not subject to VAT?
Director of Counseling, Services, and Public Relations of the Directorate General of Taxes of the Ministry of Finance Hestu Yoga Saksama explained that the application of VAT on coal is to uniform value added tax treatment for all coal mining companies.
The reason is that, according to him, there are different regulations regarding the imposition of VAT on coal mining companies such as holders of Coal Mining Exploitation Work Agreements (PKP2B).
“So far, with the regulation of coal before it becomes briquette, coal is non-taxable goods (taxable goods), also because of the separate arrangements through each PKP2B, there are various treatments for VAT on coal. Therefore, for uniformity. and legal certainty, coal is determined to be BKP (taxable goods), “he explained via short message to CNBC Indonesia on Monday (12/10/2020).
He said this rule would later apply to all coal companies, regardless of whether it was PKP2B or IUP.
“In principle, all coal deliveries are subject to VAT,” he said.
In Article 4A (2) amendments to Law No.42 of 2009 concerning the Third Amendment to Law No.8 of 1983 concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods, which are part of Article 112 of the Omnibus Law, reads “Types of goods which are not subject to Value Added Tax are certain goods in the following group of goods:
a. mining or drilling products taken directly from the source, excluding coal mining products; .. “
Chairman of the Indonesian Mining and Energy Forum (IMEF) Singgih Widagdo said that coal should not be subject to VAT. This is because coal is still a raw material that has not been processed and has added value. Meanwhile, VAT is imposed on goods that have added value.
“Coal should not be subject to VAT because it has not added value to the goods. Unless coal has been produced as other goods, philosophically it can be subject to VAT,” he said.
Meanwhile, according to the Executive Director of the Indonesian Coal Mining Association Hendra Sinadia, the imposition of VAT is likely because the government wants to increase state revenue from companies holding Coal Mining Exploitation Work Agreements (PKP2B) which will be extended into Special Mining Business Permits (IUPK).
“Maybe you want to ensure that the state revenue from companies holding PKP2B whose license will be extended is bigger according to the mandate of the Minerba Law, maybe yes ..” he said.
Director and Corporate Secretary of PT Bumi Resources Tbk (BUMI) Dileep Srivastava said that his party is currently reviewing the impact of the Omnibus Law on the company, both 0% royalty for coal downstreaming, VAT imposition, and environmental policies.
“We are currently studying the impact of this Omnibus Law,” he said.
(wia)
– .
