Govt to Impose Export Tax for Low-Grade Nickel Ores

The Investment Ministry/Investment Coordinating Board (BKPM) is formulating a plan to collect export tax on nickel products with less than 70 percent nickel content. Such a tax is considered necessary to protect investments in battery and electric vehicles (EV) ecosystems in the country. Investment Minister/BKPM head Bahlil Lahadalia said that policies imposed by European countries might reduce the chance of EV and battery industries in Indonesia getting the funds needed to develop.

The European Union demands a battery factory to be located near an EV factory. "Meanwhile, Indonesia is still building the downstream sector to create added values, from mining to battery cell production. If we only exploit raw materials, our country will lose a lot," Bahlil said on Tuesday. Therefore, the ministry is exploring the possibility of taxing exports of nickel products with less than 70 percent nickel content. He will discuss the regulation details further with the Finance Ministry, but one thing for sure is that these products will be subject to a fairly high tax rate. "If we do not carry out downstreaming like what other countries do, our country will continue to be lied to," he said.