Royalties vs Refunds

When the deputy chairman of the House of Representatives' (DPR) budget council, Said Abdullah struck the gavel at a meeting inside the legislature building last week, a compromise appeared within reach. Said and other members of the budget council agreed that the target of non-tax receipts (PNBP) from the oil and gas and coal sectors needed to be reduced. "What more can be done? It cannot be improved on any further," said Said after the decision was made.

It was decided at the meeting that the amount of non-tax state receipts for mining in the amended draft national budget (RAPBN-P) should be lowered to Rp30.1 trillion-down from the initial target set at the start of the year, which was Rp40.8 trillion. In the financial note to the 2016 draft state budget, the executive branch had set a non-tax receipts target from general mining at just Rp16.54 trillion. This is much less than the figure agreed on by the budget council. The reason cited was that business in this sector was sluggish. "Prices are down and demand is also down," said Minerals and Coal Director-General Bambang Gatot Ariyono.

June 14, 2016