Jakarta: Indonesia plans to introduce export duties and a windfall tax on coal and nickel as part of efforts to offset rising subsidy costs in the national budget. Finance Minister Purbaya Yudhi Sadewa said the proposed measures are still under discussion with the Energy and Mineral Resources Ministry.
According to Antara News Agency, Purbaya stated that discussions are ongoing with the energy ministry. He emphasized that the revenue generated from these measures would be sufficient to help close the subsidy gap. Purbaya highlighted that coal and nickel exports have not been subject to export duties, which has created loopholes allowing for under-invoicing and smuggling, while limiting customs authorities' ability to inspect shipments before departure.
The introduction of export duties is expected to grant greater authority to the Directorate General of Customs and Excise (DJBC) to inspect goods before export, helping to curb revenue leakages. Despite the planned tax measures, Purbaya noted that the government remains committed to promoting downstream industrial development, particularly in the nickel-based battery sector. Incentives are being considered for industries that utilize domestically sourced raw materials, aligning with Indonesia's broader push to strengthen value-added processing.
Separately, Purbaya mentioned that the government may offer tax incentives, including exemptions, for global investors placing assets in a planned financial special economic zone, or International Financial Center (IFC), in Bali. He stated that if requested, he could provide a zero percent tax rate, provided the funds enter the financial special economic zone, which should also be linked to strengthening Indonesia's foreign exchange reserves.
He added that inflows of global assets could support Indonesia's bond market by increasing foreign participation in government securities. 'They can buy government bonds. If they ask for lower yields, I can provide facilities, helping ease pressure on our bonds as the investor pool expands,' Purbaya remarked. He described the initiative as a strategic step that could be realized in the near term.
Purbaya stated that the Finance Ministry has been asked to take part in developing the IFC alongside the Coordinating Ministry for Economic Affairs and sovereign wealth fund Danantara. He assured that the legal framework, including tax incentives to be applied in the financial zone, will align with international standards. Earlier, Coordinating Minister for Economic Affairs Airlangga Hartarto mentioned that the development of the Kura Kura Bali Special Economic Zone is being accelerated as a potential site for a financial hub. The government is finalizing regulations for the financial special economic zone to support a financial center, including governance frameworks and investor-friendly facilities.