Tax Rights and Obligations of Taxpayers in the Mineral Mining Business Sector

s David Hamzah Damian
s Dwi Wahyuni
By David Hamzah Damian, Dwi Wahyuni
David Hamzah Damian
Dwi Wahyuni
The Ministry of Finance has released a regulation detailing taxation rights and obligations for taxpayers in the mineral mining business sector. This regulation has been released to implement the provisions under Article 17 paragraph (4) of Government Regulation No. 37 of 2018 concerning the Tax Treatment and/or Non-Tax State Revenues in the Mineral Mining Business Sector (Gov. Reg. 37/2018).
 
Details of the tax rights and obligations are outlined in the Minister of Finance Regulation No. 61/PMK.03/2021 concerning Tax Rights and Obligations for Holders of Mining Business License, Special Mining Business License, People’s Mining License, Special Mining Business License for Production Operations as Continuation of Contract Operations, or Contracts of Work in the Context of Cooperation in the Mineral Mining Business Sector (MoF Reg. 61/2021). This regulation has been effective as of 15 June 2021.
 
In further detail, at least five groups of taxpayers in the mineral mining business sector are regulated under MoF Reg. 61/2021, including:
  1. holders of Mining Business License (Izin Usaha Pertambangan/IUP), i.e. a license to carry out a mining business. The scope of the definition of IUP also includes holders of Rock Mining License (Surat Izin Penambangan Batuan/SIPB). SIPB refers to a license granted to carry out certain types of rock mining business or for certain purposes;
  2. holders of People’s Mining License (Izin Pertambangan Rakyat/IPR), i.e. a license to carry out mining business in a people’s mining area (Wilayah Pertambangan Rakyat/WPR) with a limited area and investment;
  3. holders of Special Mining Business License (Izin Usaha Pertambangan Khusus/IUPK), i.e. a license to carry out mining business in a special mining business license area (Wilayah Izin Usaha Pertambangan Khusus/WIUPK);
  4. holders of IUPK as Continuation of Contract Operations, i.e. business license granted as extensions after the completion of Contracts of Work (CoW) (Kontrak Karya/KK). This group also includes Production Operation IUPK, which constitutes a change in the form of mining business from a CoW in which the contract has not yet expired. CoW refers to an agreement between the government and an Indonesian corporate entity to carry out mineral mining business; and 
  5. holders of CoW that carry out mining business in various mining areas, including WIUP, WIUPK, WPR, or CoW areas which have been granted by the central government or provincial government as per their respective authorities.
The abovementioned groups of taxpayers may cooperate with each other or other parties in exploiting mineral production. Within this cooperation, both taxpayers in the mineral mining sector and other parties must carry out the stipulated tax rights and obligations.
 
In further detail, there are seven tax rights and obligations to be fulfilled. These tax rights and obligations are indicated in Table 1.
 
Table 1 Tax Rights and Obligations for Taxpayers Holding Mining License
Source: MoF Reg. 61/2021.