“The Finance Ministry is a leading institution in the negotiations. Our negotiations are based on Law No 4/2009 on coal and mineral mining,” Sri Mulyani said in Jakarta, as reported by tempo.co.

She said the formula for state revenue needed to be discussed further, because there were many things to be settled, including income taxes (PPh), added value taxes (PPN), land and property taxes (PBB), royalties and regional taxes.

She assured that there was nothing secret about the negotiation, as the same process would apply to other mining companies.

“We will negotiate with other coal and mineral companies based on various contractual agreements -- contracts of work (CoW), coal mining business permits (PKP2B) and the conversion from IUPs (mining permits) to IUPKs (special miming permits) ,” she added.

Sri Mulyani explained the government was referring to Article 128 of Law No 4/2009 for the negotiations on fiscal issues and to Article 169 for other fees, including non-tax revenue and regional revenues, which were explicitly stated in the article.

President Joko “Jokowi” Widodo has signaled to the negotiators the need for a win-win solution that benefits both the government and PT Freeport Indonesia, a subsidiary of US- based mining company Freeport McMoRan. (bbn)

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