Downstreaming Coal Companies Get Zero Percent Royalty Rate

The Indonesian Government has decided that coal companies downstreaming their operations are free from paying any royalty. This incentive is stated in the Government Regulation (PP) No. 26/2022 concerning non-tax state revenue (PNBP) in the energy and mineral sector and the Government Regulation in Lieu of Law (Perppu) No. 2/2022 on the job creation issued on Dec 30.

Article 39 of the Government Regulation in Lieu of the Job Creation Law mentions that one sub-article in the amendment to Law No. 3/2020 on mineral and coal Mining, which is Article 128A, regulates the royalty exemption for mining business license (IUP) or a special mining business license (IUPK) holders downstreaming their operations. Meanwhile, Article 3 Paragraph 2 of Government Regulation No. 26/2022 states that the royalty exemption will be regulated in an Energy and Mineral Resources Ministerial Regulation. "These regulations are to encourage the coal downstreaming," Directorate General of Taxation's director of non-tax state revenue from natural resources and separated state wealth Kurnia Chairi said on Monday.

**Government Regulation in Lieu of Law No. 2/2022 is available for downloaded at the end of this article